iiNet founder and former chief executive officer Michael Malone has come out in opposition of TPG’s proposed takeover of the Perth-based ISP.As reported by Fairfax Media, Malone, who owns around 4 per cent of iiNet, has called for fellow shareholders to reject the deal.
“My family and I do not believe this deal as it is structured is in the best interests of shareholders, staff or customers,” Fairfax reported Malone as stating. “Indeed, it is appallingly silent on the impact on staff and customers. It’s not the time to sell, it’s a time for change.”
Under the proposed $1.4 billion transaction, iiNet shareholders will receive cash consideration of $8.60 per share, with the directors of iiNet having unanimously recommended the scheme.
TPG’s proposed acquisition was first announced on March 13, with iiNet chairman Michael Smith stating the board viewed it “as a significant reward for shareholders who have shown their faith in iiNet”.
“The price of $1.4 billion is a very tangible measure of the value that the extraordinary people of iiNet have created through their innovation, brilliant service and capacity to add value,” Smith stated at the time.
Malone, however, has asked that the board stand aside if the deal does not go through.
“I ask that if this deal is defeated, then the current board stand aside,” Fairfax reported Malone as stating. “They have run out of ideas on how to grow this great company. Leave.”
iiNet’s board has, in turn, reaffirmed its position on the proposed takeover.
“Mr Malone has not been a director of iiNet for nearly a year, and has not participated in the management of the company for a longer period,” Fairfax reported iiNet as saying in a statement.
“He has expressed support for the transaction both publicly, commenting that it was a ‘sensible deal’ and ‘a cash offer and a good price’, and in discussions with the company since the offer was announced, and has now changed his position with no apparent basis.
“Were Mr Malone a director of iiNet today with the information and knowledge available to the board, his fiduciary duty to shareholders would have compelled him to join with the other directors and present this sensible, well-priced cashed offer to shareholders.”
Based on iiNet’s indicative timetable, shareholders will have the opportunity to vote on the scheme around late June.
