TPG Telecom Under Spotlight: Commenced Trading on ASX on An Ordinary Settlement Basis

Summary

  • TPG Corporation and TPG Telecom announced the implementation of the scheme of arrangement between TPM and its shareholders related to the TPM and TPG Telecom merger.
  • The discussion related to the merger of TPG Telecom and Vodafone Hutchison lasted for almost two years and finally received a green flag from the Federal and Supreme Court of New South Wales.
  • Scheme of Arrangement Became Legally Effective from 29 June 2020 and got implemented on 13 July 2020.
  • Changes were also made to the TPG Telecom and TPM board of directors.
  • TPG Telecom and Tuas have started trading on the ASX an ordinary settlement basis from 14 July 2020.

TPG Corporation Limited (ASX:TPM) (previously known as TPG Telecom Limited) and TPG Telecom Limited (ASX:TPG) (earlier known as Vodafone Hutchison Australia Limited) declared the implementation of the scheme of arrangement (Scheme) relating to the merger of TPG Corporation and TPG Telecom.

In the Scheme Meeting followed by an Extraordinary General Meeting of TPG shareholders, it was decided to change of name of TPG to set free the name ‘TPG Telecom Limited’ so that VHA can implement this name at the time of listing as a merged entity.

Background of TPG Telecom and Vodafone Hutchison Australia Merger:

The discussion related to the merger of TPG Telecom and Vodafone Hutchison Australia was ongoing since August 2018 when the two players signed a Scheme Implementation Deed and agreed to the merger of equals to set up a fully integrated telecommunications operator in Australia. However, the proposed merger was a concern for ACCC as it believed that the merged entity would not have the incentive to work similarly and would decrease the competition. The matter reached the court when TPG Telecom lodged proceedings with the Federal Court of Australia to take consent that the proposed merger would not lessen the competition.

Finally, on 13 February 2020, the Federal Court gave its verdict in favour of the proposed merger of TPG Telecom Limited and Vodafone Hutchison Australia Pty Limited.

DO READ: ACCC Decides Not to Appeal Federal Court’s Verdict to Allow TPG-Vodafone Merger

Merger Approved by TPG shareholders and Supreme Court of New South Wales:

On 24 June 2020, TPG shareholders approved the proposed merger of TPG and Vodafone Hutchison Australia Limited, and two days later, the Supreme Court of New South Wales approved the proposed merger via a scheme of arrangement.

VHA CEO Iñaki Berroeta commented that the court orders paved the way to complete the proposed merger.

Treatment of TPG Telecom Limited Demerger & Merger within the S&P/ASX 200 Index:

On 25 June 2020, S&P Dow Jones Indices announced that it would make changes in the S&P/ASX 200 Index post the final court approval of the scheme of arrangement. TPG Telecom Limited will spin-off Tuas Limited (ASX:TUA), and following the demerger, TPG Telecom Limited will merge with Vodafone Hutchison Australia Pty Limited.

TPG Telecom Limited would spin-off each share of Tuas Limited for every two TPG Telecom Limited shares. Tuas was included in the S&P/ASX 200 Index after the market closure on 29 June 2020 at a zero price.

Scheme of Arrangement Became Legally Effective

On 29 June 2020, the scheme of arrangement became legally effective. TPG Telecom Limited was admitted to the Official List of ASX on this date.

Official quotation of TPG’s ordinary fully paid shares commenced from 30 June 2020 on a deferred settlement basis.

TPG Telecom share issue:

On 13 July 2020, TPG Telecom announced that it had issued ~927.81 million new ordinary shares in TPG Telecom to ex TPM shareholders as consideration for the transfer of their TPM shares to TPG Telecom under the scheme of arrangement. The qualified ex TPM shareholders have been issued with one new ordinary share in TPG Telecom for each TPM share they held as at the Scheme record date.

Ordinary TPG Telecom shares, which would have if not been issued to Ineligible Foreign Shareholders have now been issued to the Sale Agent. They would be sold on ASX as soon as possible as per the terms defined in the TPM Scheme Booklet.

After the issue of new TPG Telecom shares, the total number of ordinary TPG Telecom shares on issue would be 1.859 billion and have equal rank.

Payment of Dividend:

Before the implementation of the scheme of arrangement, the TPM board settled the payment of the TPG Special Dividend of $0.516 per TPM share. The TPG Special Dividend was paid as a fully franked cash special dividend to TPM shareholders as per their TPM holding on the Record date of 7:00 PM, on 1 July 2020.

Also, the demerger of Tuas Limited was implemented, and the qualified TPM shareholders got the in-specie dividend distribution of Tuas share as per their holding in TPM as at the record date on 1 July 2020 at 7:00 PM Sydney time.

A Glance at the shareholders and the number of TPG Telecom shares which will be voluntarily escrowed until 13 July 2022:

Image Source: TPG's report

As per the conditions of their voluntary escrow arrangements, Vodafone Oceania Ltd and Hutchison 3G Australia Holdings Pty Limited, on 14 July 2020, would transfer ~259 million shares to Vodafone Hutchison (Australia) Holdings Limited. These shares would continue to be subject to the escrow.

Changes to the TPG Telecom and TPM board of directors:

As per the TPM Scheme Booklet, below are the names of those appointments and resignations have been made effective on 13 July 2020.

  • David Teoh, Robert Millner, Shane Teoh, Dr Helen Nugent, and Arlene Tansey have been appointed to the board of directors of TPG Telecom.
  • Barry Roberts-Thomson has resigned from his position as a director of TPG Telecom.
  • Denis Ledbury and Joseph Pang quit from their respective positions as directors of TPM.

Shareholder Information:

On 13 July 2020, the qualified ex TPM shareholders were sent the holding statements which recorded the number of new TPG Telecom shares issued to the holder as per the scheme of arrangement along with the number of Tuas shares dispersed to them under the in-specie dividend.

Further, TPM shares trading got suspended from the close of trade on 29 June 2020. On 14 July 2020. TPM would apply to be removed from the official list, and the quotation of its shares will get terminated.

TPG Telecom and Tuas have started trading on the ASX on an ordinary settlement basis from 14 July 2020.

Stock Information:

TPG stock ended the trading session at A$8.030 on 14 July, down 2.667% from the previous close.


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