TPG has snuck in a counter offer to last week's M2 bid for iiNet, ahead of the negotiated deadline last night.
It didn't take iiNet's board of directors long to determine that the new $1.56 billion offer from TPG was the better deal, notifying its shareholders this morning of the recommendation.
TPG upped the $1.4 billion cash price, arranged in March, to match the M2 group's share based offer last week that amounted to approximately $1.6 billion in shares and special dividends.
The value of cash
Though the M2 bid is technically higher in numerical value, the cash offered by TPG represents more concrete offer which attracts a premium in takeover bids.
Another interesting development is TPG's offer now includes the potential for iiNet shareholders to elect to maintain shares in the merged company rather than be forced to accept a cash payout.
This scrip option will be capped and iiNet shareholders will be able to take up a total of 27.5 million TPG shares.
If there are no further offers for iiNet the transaction is expected to be implemented by mid August this year.
