The News Corp media is reporting that a Federal Court judge has agreed to hold a trial starting on September 10 to rule whether or not the proposed merger between TPG Telecom Ltd (ASX: TPM) and Vodafone Australia should be blocked on competition grounds.
It was back in late August 2018 that the two telcos announced their intention to merge, but it took the competition regulator the ACCC 9 months to conclude in May 2019 that the merger should be blocked.
The ACCC’s main reasoning being that TPG could build its own 5G network to compete with giants like Telstra Corporation Ltd (ASX: TLS) or Optus.
However, asking a small player like TPG that already carries a swag of debt to build new infrastructure that costs of billions of dollars (on top of billions of dollars needed to acquire spectrum) does not look realistic.
After all the reasoning given for the merger was that Vodafone and TPG would have more opportunity to compete in this space if they had the combined financial firepower to do so. While a judge may also conclude it’s not the job of the ACCC to guess the future on little evidence.
If the case does start on September 10 a ruling could come in within a month, although the ACCC is reportedly already complaining it needs more time to prepare for the case.
Of course the ACCC’s dithering will have already cost TPG, its shareholders, and potentially even Australian consumers a lot of money if the court does throw out its decision to block the merger.
We hear it over and over from investors, "I wish I had bought Altium or Afterpay when they were first recommended by The Motley Fool. I'd be sitting on a gold mine!" And it's true.
And while Altium and Afterpay have had a good run, we think these 5 other stocks are screaming buys. And you can buy them now for less than $5 a share!
*Extreme Opportunities returns as of June 5th 2020
Motley Fool contributor Tom Richardson owns shares of TPG Telecom Limited. The Motley Fool Australia owns shares of and has recommended Telstra Limited. 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 Scott Phillips.
- On a serendipitous day, Tom Richardson is leaving the building – December 17, 2019 11:55am
- Why Aerometrex shares have doubled their IPO price – December 16, 2019 4:32pm
- Why the National Veterinary Care share price is going nuts today – December 16, 2019 3:39pm