Vocus sells down Amcom stake in effort to clear TPG blockage

Vocus Communications has sold its 10 percent stake in rival internet provider Amcom Telecommunications in a move that it hopes will bolster the chances of a planned merger going ahead.

Vocus sold off its 10 percent share in Amcom, while still maintaining that it will seek to purchase all Amcom shares under a scheme first proposed in December 2014.

The move comes after TPG Telecom acquired a 19.9 percent stake in Amcom, with the intention of blocking the merger without making a counter bid.

Under the scheme of arrangement backed by Amcom's board of directors, Vocus would have been unable to use its 10 percent stake to vote in favour of the move at an upcoming meeting.

"Selling our interest in Amcom to shareholders eligible to vote on the merger will provide the market the best opportunity to determine the outcome of the scheme," Vocus chief executive James Spenceley said.

Last month, Vocus asked the Australian Competition and Consumer Commission (ACCC) to investigate TPG's move to up its stake in Amcom to block Vocus' purchase of the company.

At the time, TPG said it supported the continued operation of Amcom as a stand-alone business.

While attempting to block one merger, TPG is currently seeking to purchase rival iiNet for AU$1.5 billion. TPG's offer is for AU$9.55 per iiNet share, including a AU$8.80 cash or scrip consideration, and AU$0.75 cash.

TPG was forced to up its original all-cash offer for iiNet after M2 launched a counter bid.

With AAP

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