M2 Group makes AUD1.6bn all-share offer for iiNet

27 Apr 2015

Australia’s M2 Group, the owner of alterative broadband providers Dodo and iPrimus, has reportedly lodged a counterbid to acquire Perth-based iiNet in an all-share offer worth over AUD1.6 billion (USD1.23 billion), according to the Sydney Morning Herald. With this offer topping a previous bid made for iiNet by TPG Telecom, which in March 2015 announced plans to purchase iiNet in a deal which valued the latter at AUD1.4 billion, sources were cited as saying that iiNet’s board and advisers were considering M2’s bid at the weekend.

As per M2’s proposal, iiNet shareholders would receive 0.803 of an M2 share per iiNet share, as well as AUD0.75 per share by way of a special dividend. Should the deal be seen through, iiNet shareholders would subsequently own approximately 42% of the enlarged M2 group. Meanwhile, in a statement to the Australian stock exchange confirming the offer, M2 Group claimed its proposed acquisition could offer a number of benefits to iiNet shareholders, including the possibility of deferring capital gains tax.

In a statement confirming the new offer, iiNet confirmed it was in the process of completing due diligences on M2, noting: ‘If the iiNet board determines that any counterproposal from TPG would be more favourable, or at least no less favourable to iiNet and its shareholders than the competing proposal from M2, then the iiNet board will recommend the revised TPG counterproposal, subject to no superior proposal emerging … Otherwise iiNet would expect to recommend the M2 proposal, subject to the independent expert finding the offer to be in the best interests of iiNet shareholders and subject to no superior offer emerging.’