Amcom shareholders vote 'yes' to Vocus merger

Majority of shareholders vote in favour of the deal

Amcom Telecommunications (ASX: AMM) shareholders have voted in favour of a merger with Vocus Communications (ASX:VOC) today.

According to Amcom, 99.8 per cent of non-TPG votes were cast in favour of the Scheme. Of the 181.4m shares voted at the meeting either in person or by proxy other than by TPG, only 0.3m voted against the resolution, a statement issued by the company said.

"Amcom shareholders have turned out in force and had their say, with almost every shareholder who voted, other than TPG, voting in favour of the combination with Vocus," said Amcom chairman Tony Grist.

The vote came despite opposition from TPG to the move. TPG is a long standing shareholder of Amcom and recently increased its equity interest in Amcom to 19.99 per cent.

Amcom and Vocus entered into a scheme implementation agreement in December. Amcom shareholders will receive 0.4614 Vocus Communications shares for each Amcom share held. This works out to $2.45 per Amcom share.

In May, Vocus sold its 10 per cent interest in Amcom to give the merger the best chance of success.

Amcom is scheduled to appear before the Federal Court of Australia on 23 June to seek court approval of the scheme.

Telecommunications analyst Paul Budde said he was generally in favour of the outcome

“In the wake of the iiNet-TPG merger, we need healthy competition to survive in the telecommunications market,” Budde said.

“This is a bit of an uphill battle as telecoms is so rapidly commoditising, with margins slipping and costs still too high that further consolidation in whatever form is set to continue in the foreseeable future.”

“So in other words with TPG being one of the financial most successful players they are going to continue to use their dominant position in the market to their [competitive] advantage, both for the good and the bad,” he added.

Vocus has been on the acquisition path over the past 12 months. In July 2014, it acquired New Zealand-based fibre provider FX Networks for $107.7 million.

In August, Vocus Communications acquired ASG Group’s Perth data centre for $11.7 million.

In February 2015, it purchased two data centres from Enterprise Data Corporation (EDC) for $23.5 million.

Follow Hamish Barwick on Twitter: @HamishBarwick

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