Telco Puts Soul Into Internet Service Provider Bid
Newcastle Herald
Friday February 8, 2008
NEWCASTLE-based SP Telemedia, which trades as Soul, has offered to buy internet service provider TPG in a $230 million cash and scrip bid.
The telco, which sold NBN Television and its outside broadcast operations to PBL media in May last year for $250 million, said consolidation in the industry was essential.SP Telemedia is offering $150 million cash and 270 million of its shares to buy TPG Holdings.Based on SP Telemedia's 35 cent per share price, the deal would give TPG an enterprise value of about $230 million.SP Telemedia chairman Robert Millner said the company needed to replace its assets following the sale of NBN last year.He said consolidation in the industry was essential and the merger with TPG would give SP Telemedia access to a much larger network."We believe that following the merger, SP Telemedia will be strongly positioned to participate in any further industry consolidation," Mr Millner said."The combined group will have one of the largest DSLAM networks in Australia and will be one of Australia's most profitable telecommunications companies in terms of profit margin."DSLAM boxes were prized as they allowed telecommunications companies to unbundle services from the Telstra network and supply to customers directly without having to resell the network.The transaction would expand SP Telemedia's customer base and network footprint and would be earnings per share accretive.TPG also owns 70.25 per cent of Chariot, a listed internet service provider with a market capitalisation of $9 million. with AAP
© 2008 Newcastle Herald
