iiNet shareholders vote for TPG buyout

ISP to live on as a premium brand for TPG after deal receives 95.09 per cent support from iiNet shareholders

Only Australian Competition and Consumer Commission approval remains as a barrier to TPG's acquisition of iiNet, after iiNet shareholders today voted in favour of the deal.

A statement from iiNet said the deal was supported by 89.93 per cent of iiNet shareholders present and voting (either in person or by proxy) at the meeting. An overwhelming 95.09 per cent of votes cast backed the TPG offer.

"The takeover process we have been through over recent months demonstrates how strategically valuable iiNet has become to national players in the telecommunications sector as the industry heads towards an inevitable consolidation phase," iiNet's chairperson, Michael Smith, said in remarks prepared for today's shareholder meeting.

"It's clear we have built a business with a brand, customer base and reputation for customer service that a number of key players in the industry would like to own. This is a testament to the dedicated team we have at iiNet that is so well led by our CEO David Buckingham. I would like to formally acknowledge all of their efforts and express my genuine appreciation.

"It would also be remiss not to acknowledge the past efforts and achievements of [iiNet founder] Michael Malone in building this company from such humble beginnings. We certainly wouldn’t be where we are today without his tireless efforts over many years."

Malone has criticised the deal.

The acquisition will make TPG the number two broadband provider in Australia by subscriber numbers with more than 1.7 million broadband customers and combined revenues of $2.3 billion and EBITDA of $654 million.

TPG's offer for the ISP received the unanimous support of iiNet's board as well as an independent expert commissioned to assess the deal.

TPG's move to acquire iiNet was first revealed in March. TPG later issued a revised offer after M2 entered a competing bid to buy iiNet.

As a result of today's vote, shareholders will receive either $8.80 cash or 0.5533 TPG shares plus $3.77 cash for each iiNet share, as well as a discretionary special dividend of up to $0.75 per share (or a top-up cash payment if it is less than $0.75).

The Australian Competition and Consumer Commission is assessing the impact of the merger on broadband competition. The ACCC expects to announce its final decision on 20 August.

Barring a move by the competition watchdog to halt the acquisition, iiNet shares are expected to be transferred to TPG on 7 September.

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