Soul/TPG buys Pipe Networks for $373m
- 11 November, 2009 17:26
Telecoms operator, Soul/TPG (ASX: SOT), is set to acquire networking player, Pipe Networks (ASX: PWK).
Pipe sold 2.8 million shares to Soul/TPG at $6.30 apiece on November 9 and both companies have entered into a Merger Implementation Agreement. This will see Soul/TPG take on shares outstanding in Pipe for $6.30 per share, subject to approval by Pipe shareholders at a March 2010 meeting. The overall deal values Pipe's equity at $373 million.
Under the arrangement, Soul/TPG is acquiring Pipe's fibre optic network as well as its Pipe Pacific Cable (PPC-1)submarine cable system assets between Sydney and Guam.
The transaction is expected to be finalised by December 11 and confirmation of funding by the purchasing company to be received by December 18. In an ASX statement, Soul/TPG executive chairman, David Teoh, said the transaction will “position [the company] as a fully integrated telecommuniations company with a broad spectrum of offerings and a major role in Australia’s telecommunications industry”.
He highlighted synergies between the two organisations, along with Pipe’s international bandwidth, as competitive advantages, and said the deal offer a broader range of services to customers on both sides.
“Pipe’s extensive metropolitan dark fibre network will increase SPT’s capabilities as a data communications provider,” Teoh stated.
According to an ASX statement, Pipe’s board of directors have unanimously recommended the offer to shareholders. The statement said Soul/TPG offered shareholders a greater price per share than Pipe’s closing share price at any point since its listing.
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