iiNet considers M2 bid
M2 Group will know this morning whether its $1.52 billion bid for iiNet has put it in the driver's seat in the increasingly hostile takeover battle for the internet services provider, with the target's board set to meet in Perth today.
With most analysts predicting the board's decision will fall in favour of M2, it means fellow suitor TPG and its billionaire boss David Teoh will have until Monday to counter the deal with a better offer.
The expectation that Mr Teoh will step up to the plate - in turn creating a bidding war for the Perth company - put a rocket under iiNet shares yesterday, with the stock jumping 22� to $10.02, the first time it has breached the $10-a-share mark.
On Monday, M2 Group, which owns dodo and iPrimus, threw a spanner at TPG's bid for iiNet - originally announced on March 13 - with its own cash-and-scrip bid after weeks of secret talks.
M2's original headline offer, including synergies, valued iiNet at $1.87 billion.
M2 shares fell 62¢ on Monday and a further 16¢ yesterday to $10.74, valuing its proposal at $9.37-a-share, or $1.52 billion.
The M2 share price will be watched closely by iiNet shareholders and TPG. Its $8.60-a-share offer is cash.
M2 also drew fire from some quarters on Monday for its tactic of including the value of synergies in its proposal and yesterday backed away from the state- ment, releasing a "clarification" to the Australian Securities Exchange.
"While that value (with synergies) was determined based on considerable work undertaken by M2, M2 recognises that there may be differing views on the appropriate value to be ascribed to such synergies and risks in achieving such synergies," the statement said.
All parties were yesterday keeping cards close to their chests and did not respond to requests for comment ahead of iiNet's expected announcement this morning.
Meanwhile, iiNet founder Michael Malone, who confirmed he still owns 2.5 per cent of iiNet, threw his hat into the ring yesterday, endorsing M2's bid, labelling it "excellent".
"iiNet and M2 work well together," he said.
Mr Malone made waves last month when he publicly criticised the iiNet board and TPG's offer, urging iiNet's 12,000 retail shareholders to oppose it.
