After suffering a blow in Monday's merger between Amcom Telecommunications and Vocus Communications, TPG has refocused its attention on the pending takeover of telecommunications rival iiNet.
With the schedule for the TPG takeover of iiNet laid out, the telcos have published a scheme booklet for investors in a plea to get them to vote in the non-compulsory meeting next month.
The consumer watchdog said it will look into what will come of iiNet's strong customer service, indicating that many customers have raised concerns that TPG would reduce the level of customer service that iiNet is known for. According to ACCC chairman Rod Sims, the commission will also look at the ramifications for competition if the merger of two of the five largest suppliers of fixed broadband in Australia were to go ahead.
TPG chairman David Teoh has broken his silence on the situation, publishing a short, one-page letter to iiNet shareholders within the 336-page scheme booklet.
With TPG boasting a net profit after tax of AU$171.7 million last financial year and AU$106.7 million for the half year ending January, Teoh considers that the iiNet and TPG businesses are highly complementary in terms of geographic presence, market segments, and corporate customer base.
"The combined businesses will provide broadband services to over 1.7 million subscribers, and will be well positioned to deliver scale benefits in an NBN environment," he said.
"TPG acknowledges that the value of the iiNet business is a result of the high levels of customer service provided by iiNet staff, and for this reason intends to maintain the iiNet brand as part of a dual-brand strategy. Moving forward, TPG intends to preserve and foster this key strength."
iiNet chairman Michael Smith posted similar views in his foreword.
In its scheme booklet, iiNet said that as a result of the M2 proposal, TPG had been released from the standstill provisions that had previously applied, allowing TPG to up its stake in iiNet should the scheme be rejected.
iiNet shareholders have been given the option to receive cash for their shares, or elect to receive TPG shares plus a special dividend. If the deal goes ahead, iiNet shares will be suspended from trading on Monday, August 24, 2015, and the new TPG shares will trade on the ASX on Tuesday, September 8, 2015.