Ann: Changes to the Board of Directors-VOC.AX, page-27

During the merger, why is it that M2 shareholders ended up having a larger slice (56%) of the merged entity? If you look at the old Vocus, how much profits had it generated previously? Why has the EBITDA and NPAT jumped so significantly after the merger? Isn't that because M2 had ~4 times the revenue of Vocus, ~3 times the EBITDA, and 2-2.5 times the NPAT (depending on whether you look at underlying NPAT or reported NPAT)??

So, which was a stronger business? M2 or Vocus? Which earned more money?

The way I see it is the old Vocus management is a builder, and are good at building new networks. They may not be good sweater of assets, or they just haven't been given enough time to do that (may take 10 years??).

When the 2 entities merged, I think it's a very logical rationale from the perspective of vertical integration. Both together makes a stronger business. Vocus by itself is not great (or not yet there) in getting more EBITDA from its fibre network, and M2 was facing growth challenges. Now, M2 can reduce its cost from moving its customers onto Vocus Fibre network, and also cross-sell to Vocus' customers. Vocus can now have more customers on its fibre (Increased utilisation). So, it's a win-win I think.

In short, having M2 CEO on the helm isn't a turn-off for me as an investor. I see that both CEOs could possibly do the job as well, but having both in the same company will only cause too many fights. A Chinese saying that goes 'A mountain can't contain 2 tigers' (as they'll end up killing each other). So, with one tiger leaving the company now, at least the remaining tiger can continue to reign on the mountain and prosper.