TPG Telecom has advised the ASX (Australian Securities Exchange) today that it plans to purchase 100 per cent of iiNet for a cool $1.4 billion.
iiNet shares will be purchased at $8.60 per share, which is significantly higher than what shares of the company are currently trading for on the market ($6.80) and is also more than the company has ever traded for.
The purchase, which is highly recommended by the iiNet Board, will put the combined revenues of both companies at $2.3 billion.
TPG and iiNet are calling the move strategic, as it would see a “value-based” provider join forces with a “premium, high-quality” provider, giving the pair the best of both worlds, while also widening each company’s reach across several regions and positioning the combined businesses to “deliver scale benefits in an NBN environment.”
The deal will bring both company’s combined customer base to 1.7 million broadband subscribers, putting it ahead of Optus, which has a customer base of 988,000 broadband subscribers.
iiNet shareholders will need to vote on the deal in their annual shareholders meeting this coming June.