Conjecture continues to grow on a possible acquisition as industry analysts are predicting that an iiNet takeover by TPG makes increasing strategic sense due to the reaffirmed earnings by TPG yesterday.
The forecast for EBITDA is believed to be around $250-270 million and TPG have also indicated that their debt would be reduced by $100 million for the 2012 financial year. If a transaction were to occur, the end result has the potential to take up about 20% of the market share. However it’s likely that any type of acquisition would take quite some time to undertake.
Read more at smartcompany.com.au – Speculation grows over iiNet takeover as TPG reaffirms guidance, renegotiates debt
Updated on: Nov 22, 2011 by Admin
In October this year TPG stealthily purchased a 4.4% share of iiNet which now sits at a healthy 5.1%. TPG stated they had no intention other than to own shares in iiNet for strategic reasons. Then again, what other purpose would there be for a rival Telco to buy shares in a competitor other than having fundamental intentions to apply a takeover at some stage?
iiNet CEO Michael Malone said he has not met with TPG’s management in relation to an acquisition and further stated that the ACCC places a 20% market share threshold which would make it difficult for companies who have a greater share than this to buy iiNet. That would strike out Telstra and Optus, however TPG would probably sit on the borderline. In addition to ACCC conditions, a takeover such as this would also require a public inquiry and may need to be examined by the Federal Government.
Whether TPG are actually considering an acquisition or not, there’s certainly signs there that flag this possibility. TPG’s 5.1% stake is a fairly obvious sign and one that is probably enough to cause Michael Malone and iiNet some concern.
Read more at delimiter.com.au – TPG buyout to require public inquiry, says iiNet