TPG takeover of Telemedia approvedApril 7, 2008 Shareholders of...

TPG takeover of Telemedia approvedApril 7, 2008
Shareholders of SP Telemedia Ltd have approved the company's takeover of internet provider TPG Holdings Ltd.

SP Telemedia is the telecommunications company that operates the SOUL mobile phone brand.

The takeover was expected to be completed by April 22.

SP Telemedia offered $150 million in cash and $230 million of its shares, valuing TPG at about $244 million at Monday's share price.

Shares in SP Telemedia gained 0.5 cent to close at 41 cents.

The combined business will be one of Australia's largest DSLAM networks with about 700,000 customers.

DSLAM - or digital subscriber line access multiplexers - allow companies such as SP Telemedia to create their own internet and telephone packages for customers rather than reselling products of Telstra Corp, which owns the nation's copper wire telecommunications network.

"The merger of SP Telemedia and TPG has created one of Australia's largest and most profitable telecommunications companies, well placed to participate in any further industry consolidation," Robert Millner, outgoing chairman of SP Telemedia said in a statement after the market closed.

David Teoh, who founded TPG in 1986, will become executive chairman of SP Telemedia, while Mr Millner will remain a non-executive director.

Earnings before interest, tax, depreciation and amortisation was expected to exceed $100 million for the combined group, Mr Millner said.

SP Telemedia will pay a special dividend of 2.4 cents a share to shareholders who are holding stock as of April 17.

SP Telemedia intends to make a scrip offer for the remaining 29.75 per cent of Chariot Ltd, a listed internet service provider that is majority owned by TPG and has a capitalisation of $9 million.