iiNet Favors TPG's $1.24 Billion Sweetened Offer Over M2's Matching Bid

NEW YORK (The Deal) -- Australian broadband provider iiNet on Wednesday, May 6, recommended shareholders accept a sweetened A$1.56 billion ($1.24 billion) takeover proposal from TPG Telecom that matches a rival cash-and-stock bid from M2 Group, because it offers investors the option to take cash for their iiNet holdings.

TPG said it would pay iiNet shareholders A$9.55 for their iiNet shares including either A$8.80 in cash or 0.969 of its own shares as well as a A$0.75 dividend for each iiNet share. TPG said it would limit the number of shares it would issue for the purchase to 27.5 million and would adjust the offer if too many iiNet investors opted for stock.

"The certain value of cash under the revised TPG offer is preferable on a risk-adjusted basis to the inherently uncertain future value of a combined iiNet and M2 under the M2 proposal. The returns to iiNet shareholders under the M2 proposal would ultimately depend on successful integration of the two businesses and capturing of synergy benefits, as well as the continued trading performance of both businesses," iiNet said.

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