Deadline looms for TPG Telecom Ltd: Here’s what you need to know

TPG Telecom Ltd (ASX:TPM) has until close-of-business to match M2 Group Ltd’s (ASX:MTU) offer for iiNet Limited (ASX:IIN).

| More on:
a woman

Although most of the market’s attention will be focused on the banks’ earnings reports and the Reserve Bank’s latest stance on interest rates, TPG Telecom Ltd (ASX: TPM) could steal the limelight later in the day should it choose to make a counter-offer for iiNet Limited (ASX: IIN).

In March, TPG Telecom made an all-cash offer for its smaller rival in a deal that would value the business at roughly $1.4 billion. It said it would pay $8.60 per share (in addition to a 10.5 cent dividend) in an offer that many investors considered to be a ‘bargain’ considering the enormous synergies that could be recognised by TPG.

Last week however, rival telco business M2 Group Ltd (ASX: MTU) lodged what is considered to be a superior deal, offering iiNet investors 0.803 of its own shares for every iiNet share held, in addition to a 75 cent dividend (franked to the maximum extent possible). Based on the closing price of M2 Group’s shares on the day prior to the offer being made, that valued iiNet at $10.00 per share or roughly $1.6 billion.

Will TPG match M2 Group’s offer?

Based on the terms of agreement between TPG Telecom and iiNet, TPG has the right, but not the obligation, to match any rival offer made. iiNet gave the company three business days to decide whether it would lodge another bid, giving TPG until close of business today to do so.

While it was initially expected that TPG would match any competing offer made for iiNet, that theory is now up in the air after the company strategically acquired shares in Amcom Telecommunications Limited (ASX: AMM) in an effort to block a merger between it and Vocus Communications Limited (ASX: VOC). Whether that will impact TPG’s strategy moving forward remains to be seen.

M2 Group has also said that iiNet only have until 5pm tomorrow to enter into their proposed scheme of arrangement, otherwise it will withdraw its proposal altogether (but reserved the right to make another proposal).

Indeed, investors will be watching the banks closely and waiting anxiously for the 2:30pm interest rate decision, but today could also be a game-changer for Australia’s telecommunications sector. Watch this space for any updates.

Wondering where you should invest $1,000 right now?

When investing expert Scott Phillips has a stock tip, it can pay to listen. After all, the flagship Motley Fool Share Advisor newsletter he has run for over ten years has provided thousands of paying members with stock picks that have doubled, tripled or even more.*

Scott just revealed what he believes could be the five best ASX stocks for investors to buy right now. These stocks are trading at near dirt-cheap prices and Scott thinks they could be great buys right now.

*Returns as of January 12th 2022

Motley Fool contributor Ryan Newman does not own shares in any of the companies mentioned. You can follow Ryan on Twitter @ASXvalueinvest. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

More on ⏸️ Investing

Close up of baby looking puzzled
Retail Shares

What has happened to the Baby Bunting (ASX:BBN) share price this year?

The share price of ASX infant products retailer Baby Bunting Group Ltd (ASX:BBN) has been a solid performer so far …

Read more »

woman holds sign saying 'we need change' at climate change protest
ETFs

3 ASX ETFs that invest in companies fighting climate change

A new landmark report by the Intergovernmental Panel on Climate Change (IPCC) was released earlier this week. It provided a …

Read more »

a jewellery store attendant stands at a cabinet displaying opulent necklaces and earrings featuring diamonds and precious stones.
⏸️ Investing

The Michael Hill (ASX: MHJ) share price poised for growth

Investors will be keeping an eye on the Michael Hill International Limited (ASX: MHJ) share price today. The keen interest …

Read more »

ASX shares buy unstoppable asx share price represented by man in superman cape pointing skyward
⏸️ Investing

The Atomos (ASX:AMS) share price is up 15% in a week

The Atomos Limited (ASX: AMS) share price has been on a tear this past week, rising 15% on the back …

Read more »

asx share price competitions represented by businessmen arm wrestling
Retail Shares

How does the Temple & Webster (ASX:TPW) share price stack up against Nick Scali (ASX:NCK)?

Online furniture retailer Temple & Webster Group Ltd (ASX: TPW) had a breakout year in 2020, moving from relative obscurity …

Read more »

A medical researcher works on a bichip, indicating share price movement in ASX tech companies
Healthcare Shares

The Aroa (ASX:ARX) share price has surged 60% since its IPO

Shares in ASX healthcare company Polynovo Limited (ASX: PNV) almost doubled in price last year. And, despite a shaky start …

Read more »

asx investor daydreaming about US shares
⏸️ How to Invest

How to buy US shares from Australia right now

Investing in other geographic markets has become a popular way to diversify a portfolio. The risks associated with being exposed …

Read more »

person reading news on mobile phone
⏸️ Investing

Why Fox (NASDAQ:FOX) might hurt News Corp (ASX:NWS) shareholders

Despite the News Corporation (ASX: NWS) share price getting a 31% bump between November last year and today, News Corp …

Read more »