Malone won't block TPG bid for iiNet
iiNet's former CEO and founder Michael Malone has said that TPG's new bid for his former company is improved over its original offer, and he will not seek to block any takeover of iiNet.
TPG on Wednesday raised its offer for iiNet to AU$1.5 billion, with the iiNet board recommending the new TPG offer above the M2 offer made last week.
Malone, among others, had criticised the board at the time for accepting TPG's initial offer, and said the culture clash between the lean, low-cost TPG service compared to iiNet's premium brand meant the two companies would not be a good fit.
Since the new offer has been announced, iiNet chairman Michael Smith has stressed that the value of TPG's offer alone shows that the company will be committed to keeping iiNet for what it is known for, and not just raid the company for its customer base.
"[TPG is] paying many hundreds of millions of dollars for a customer group, and a company that has been very successful in winning and keeping customers through service," Smith told journalists on Wednesday.
"It's like Volkswagen buying Porsche -- if you tried to turn Porsche into a Volkswagen, you would destroy the brand. If TPG didn't run iiNet like it has been run in terms of its capacity to deliver service and attract customers because of that brand proposition, they're placing at risk the amount of money they've paid -- the significant premium."
In a post on broadband enthusiast website Whirlpool on Thursday, Malone said the "cultural mismatch" between TPG and iiNet was overstated, but did not say whether he approved the new bid.
"To be blunt, I'm not sure yet about this new bid. To be fair to TPG, they have listened to shareholder comments and the new offer does address those concerns," he said.
"How do I feel? Well, of course I always wanted iiNet to be an independent voice. But I have said since 1999 that I will not (and now cannot) use our shareholding to block a fair bid."
Malone's stake in the company has significantly reduced since his departure, and he reportedly controls 2.5 percent of the company's shares.
Fairfax has also reported that up to 14 percent of the company's shareholders are displeased with the second TPG bid.
M2's original bid is now considered withdrawn, but the company is not prevented from launching a second bid.