iiNet has given TPG three business days to submit a counter acquisition offer to bidding rival M2 Communications, as the battle to form a giant telco heats up.
M2’s share-based offer placed a higher valuation on iiNet, valuing the ISP at around $1.6 billion, or up to $2.25 billion if expected earnings from business synergies are taken into account.
M2 also stressed its plan to “nurture” iiNet as a standalone brand and that it would take advantage of iiNet’s “customer ethos”, following concerns from some about how TPG’s approach would mesh with iiNet.
iiNet reports that, while a proposed M2 scheme is share-based and thus different to TPG’s offer, where comparable, the M2 agreement is “on terms no less favourable to iiNet shareholders”.
iiNet has until 5pm on 6 May to enter into an agreement with M2, the telco states, otherwise it will withdraw the proposal.
If the M2 offer proceeds to a scheme of implementation agreement, iiNet reports it will have an expert look at whether the offer is in the best interests of shareholders, including the synergies M2 expects to bring to the deal.
iiNet Chairman Michael Smith said: “We have to recognise that evaluating the M2 and TPG proposals require careful analysis given TPG is offering cash and M2 is offering shares in a significantly enlarged telecoms company.”
Smith noted that it will be up to shareholders whether they accept the offer the iiNet board recommends.