The combined entity would more than double TPG’s broadband subscriber base to over 1.7 million customers as it competes with rivals like Telstra and Singtel Optus.
Under the proposed deal, TPG, which already has a 6.25% stake in iiNet, will pay $6.57 (A$8.60) per share. It will also pay iiNet shareholders a planned midyear dividend of A$0.105.
"The Board views this as a significant reward for shareholders who have shown their faith in iiNet," said the company’s chairman Michael Smith. The offer was unanimously recommended by its board of directors who are expected to vote in favour of the deal.
The announcement follows reports in December 2014 that Vocus Communications, which owns a fibre network in Australia and New Zealand, had approached Western Australia’s Amcom Telecommunications about merging their businesses.
The takeover is expected to be completed in July, with the proposal subject to both regulatory and shareholder approval. Macquarie Capital and Azure Capital served as advisors to TPG and iiNet respectively.
