Telecommunications company, iiNet (ASX:IIN), has entered into a revised scheme implementation agreement with TPG Telecom following its submission of a counter proposal. This is a result of the matching right process contemplated under the Scheme Implementation Agreement (“TPG SIA”) between the two companies.
The news comes off the back of M2 Group’s recent announcement that it has submitted a rival bid for iiNet, following TPG's $1.4 billion all-cash takeover proposal it signed with the company in March. The iiNet Board has determined the revised TPG offer is more favourable to iiNet and its shareholders than the competing proposal it recently received from M2 Group.
The counter proposal is an increased offer of $9.55 cash per iiNet share, incorporating a $0.75 special dividend. TPG has also proposed a capped scrip alternative of 0.969 TPG shares for each iiNet share held by shareholders that elect to roll over their holdings.
The company has recommended all iiNet shareholders vote in favour of the revised TPG offer in the absence of a superior proposal and subject to the independent expert concluding that the revised TPG offer is in the best interests of iiNet shareholders.
iiNet chairman, Michael Smith, said the certainty of value and the flexibility offered by the scrip alternative in the revised TPG offer was compelling when evaluated against the M2 Proposal.
“The Board has weighed up both offers and given careful consideration to the merits of a primarily cash-based offer, to one which predominantly comprised scrip. We believe the revised cash offer of $9.55 from TPG is favourable to M2’s predominantly scrip offer.
“iiNet shareholders may also roll over into TPG scrip instead should they wish to do so, subject to the cap on the total number of TPG shares,” he said.
Both TPG and M2 have also indicated their intention to retain the iiNet brand, and accordingly, its customer service engagement.
A scheme booklet containing information relating to the revised TPG offer, the reasons for the directors’ recommendation, an independent expert's report and details of the scheme meeting is expected to be sent out to iiNet shareholders in mid-June.