Alternative Australian broadband provider TPG Telecom has announced plans to acquire rival iiNet in a deal which reportedly values the latter at AUD1.4 billion (USD1.07 billion), the Sydney Morning Herald reports. With the merger of the two providers expected to create the country’s second largest fixed line telecoms provider in terms of subscribers, the combined entity would have approximately 1.7 million fixed broadband customers. However, while TPG has offered AUD8.60 a share for iiNet in what has been termed a friendly transaction, there are suggestions from analysts that a counterbid for the Perth-based operator – possibly from Optus – could drive the purchase price even higher.
Meanwhile, the Australian Competition and Consumer Commission (ACCC) is already said to have suggested it will conduct a public review of the takeover once both parties submit their proposals, with the watchdog saying in a statement: ‘We will call for submissions at that time and details will be posted on our public register … The ACCC reviews mergers and acquisitions which have the potential to raise concerns under the Competition and Consumer Act (CCA) 2010 … The CCA prohibits acquisitions that would have the effect, or be likely to have the effect, of substantially lessening competition in a market.’
Sydney-based TPG already owns 6.25% of iiNet, and it is understood that the proposed transaction it aims to increase this to 100%. Commenting on the decision to make a bid for iiNet, TPG executive chairman and chief executive David Teoh said the combined businesses will be well positioned to capitalise in an up scaling in the rollout of the national broadband network, noting: ‘iiNet and TPG are highly complementary businesses in terms of geographic presence, market segments and corporate customer base.’