So on the face of it Amcom Telecommunications’ (AMM) shareholders have beaten TPG Telecom’s (TPM) attempt to scuttle their $1.2 billion merger with Vocus Communications (VOC) after the results of yesterday’s meeting of Amcom shareholders.
Back in December Amcom agreed to merge with Vocus to create a national telecommunications powerhouse. The company would have become a $1.2 billion listed group, but TPG, which had been sitting on a sdmall shareholding, lifted its stake to 19.9% in an attempt to frustrate the deal.
That move by TPG meant over 75% of Amcom shares that were not owned by TPG had to show up and vote in favour of the Vocus merger for it to approved.
That was considered to be very hard to achieve as scheme meetings (the merger was to be done via a scheme of arrangement) in most mergers only see between 50 and 70% of shares voted.
Vocus, which had built a shareholding in Amcom, was unable to vote that holding in a scheme meeting. So it seemed that TPG could frustrate the deal by forcing it to fail and then pick off the two companies, along with its other takeover target, iiNet (which is a Perth-based group like Amcom).
But Vocus turned around and sold off its shares to unassociated parties to try and improve the chances of the merger being approved.
But Amcom shareholders have created history by voting en masse in favour of the deal and against TPG – 99.8% of the shares (other than TPG’s 19.9% stake) voted for the deal and brokers said that to best of their knowledge, it was the first time a scheme of arrangement vote has succeeded in the face of such a large blocking stake (TPGs).
VOC vs AMM 1Y – Vocus, Amcom rally shareholders
Vocus said in a statement after the meeting: “Excluding TPG, 99.8% of the votes cast by Amcom shareholders at the Scheme meeting were in support of the Scheme.”
And Vocus’ Chief Executive Officer James Spenceley said in the statement:
“This is a resounding endorsement of the transaction by the overwhelming majority of Amcom shareholders. The merger presents the shareholders in both Vocus and Amcom with a highly compelling and unique opportunity to benefit from the creation of a company that is optimally positioned to capitalise on opportunities in the telecommunications sector.”
But will the vote be confirmed by the Federal Court at a hearing on June 23? Some brokers say there are reports that TPG will attempt to have the vote blocked because of doubts about the sale of Vocus’s 10% stake in Amcom to other parties.
TPG could challenge this sale in court by claiming the votes offloaded by Vocus were tainted and should not be allowed into the process. TPG has until next week to reveal its approach post yesterday’s vote.
Amcom and Vocus shares were suspended ahead of the meeting – TPG shares eased 0.4% to $8.60 yesterday.
