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Soul/TPG lays down Pipe final offer

TPG will not offer a higher price, but the board recommends shareholders should approve it

Soul/TPG (ASX:SOT) is trying hard to convince Pipe Networks (ASX:PWK) shareholders the deal on the table is the best and final offer.

TPG has so far bought 2.8 million shares from Pipe and is offering $6.30 per share for the rest of the company.

The ISP merged with competitor, Soul, in 2008 and announced its intent to snap up wholesale networking player, Pipe late last year.

The overall deal values Pipe’s equity at $373 million and the Pipe board has recommended shareholders approve the scheme.

In a statement, TPG executive chairman, David Teoh, said the company considered $6.30 per share was a fair price and would not increase it.

Pipe’s fibre optic network and Pipe Pacific Cable (PPC-1) submarine cable system assets between Sydney and Guam will be transferred to TPG if the acquisition is given the green light.

ISP clients of the networking giant were none too pleased with the deal despite Pipe CEO, Bevan Slatthery’s insistence it will be business as usual for the company.

With many ISPs in direct competition with TPG, some have come out claiming the deal represents a conflict of interest and will reduce competition in the service provider space.

Last month, TPG (ASX: TPM) was set to raise $70 million in capital to reduce debt ahead of the acquisition.

The Pipe shareholders meeting is set to be held in Brisbane on March 12.

Nominations for the 2012 ARN IT Industry Awards open on Tuesday, June 12.

More about: TPG
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Comments

1

24234234

Tue 09/03/2010 - 11:51

Pipenetworks should of never been sold!

TPG will put it into the ground.
R.I.P Pipenetworks

2

schneider

Tue 09/03/2010 - 13:34

This is the wrong decision from a future point of view. On a truly financial point of view the shareholders would be happy but if they thought they were part of a wave of people trying to also do good while investing they would not be happy. TGP is one of the worst run ISPs in the country and I would almost grantee this quality will pollute this great company. I can see a lot of companies jumping off the Pipe network if this happens. TGP need to pull their heads in. This offer should never have been made and the ACCC are not doing their job if they allow the merger to go ahead!

3

Jarrod

Fri 12/03/2010 - 02:10

As a TPG customer of a number of years who has nothing bad to say about them, I'd be quite happy if they acquired PIPE. Go get 'em, boys.

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