IIN (ASX) Ann: TPG to Acquire iiNet in a Recommended Transaction

Originally posted by KerrodT ↑

For what its worth, I think TPG have got themselves a bargain here. In the TPG market presentation they say that the acquisition is EPS accretive from day 1 (excluding amotization of intangibles on acquisition). There are very few acquisitions of this nature in the current market that offer immediate EPS uplift to the acquirer.

And this is before TPG get serious about build out of the combined infrastructure, before TPG unlock the untapped potential that exists within all of these telco businesses and before the real benefits of the NBN start to roll out into the market.

I hope, I truly hope, that IIN agreed to this offer from TPG in the hope/expectation/desire to start an auction for their assets and to get an ultimately higher price either from someone else or TPG.

I think the business would be attractive to private equity buyers in some form or another from an earnings, growth, profile, potential perspective. The price is far too cheap for the PE universe to outright ignore what is on offer here.

I think MTU and Optus would both take a good look, even if just to rule it out.

Looking at adjacent market opportunities, home/personal/SME video on demand is going to grow exponentially in Australia and all other developed markets. Personal data usage will continue to grow. The overseas groups who were looking at Network 10 recently would have to have a look at IIN as an alternate to Network 10 as a different method of achieving their same objective (but perhaps with more potential and upside and a whole lot less baggage and legacy issues).

I own IIN. I do not own TPG but they are on my watch list. In my personal portfolio analysis I have held off on TPG but bought IIN because I thought it had better upside potential at the moment. I wrote 3 months ago that IIN was a possible takeover target as the market wasn't understanding what they have been doing.

I'd be disappointed if this price is the best that the market can offer IIN with all of the circumstances considered.

All of the above is my own opinion. Do your own research and make your own decisions.

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.....as I was saying......