Following to the confirmation of exploratory merger discussion released on 22 August 2018, TPG Telecom (ASX: TPM) today, i.e. 30 August 2018, announced a proposed merger of equals transaction with Vodafone Hutchison Australia (VHA) in which TPG shareholders will own 49.9% of the new merged group while VHA shareholders will clench remaining 50.1% holding.
The merger will result in formation of fully integrated telecommunication operator in Australia. This combination of leading mobile operator VHA and TPG’s fixed line services will strengthen scale and financial muscle to the merged group, thus putting forward tough competition against Telstra and Optus.
The merger is said to be implemented via TPG Scheme of Arrangement with the new merged group to be called as “TPG Telcom Limited” having pro forma enterprise value of approximately $15.0 billion.
In the absence of better proposal TPG Directors unanimously recommend in favor of the scheme. The Board of TPG also indicated to distribute a fully franked cash special dividend to TPG shareholders prior to completion of the merger.
On the good news of proposed merger of highly complementary telecommunications companies, TPG’s shares soar 16.307% to $9.165 on 30 August 2018 (1:27 PM AEST).
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