SP Telemedia makes $373m bid for PIPE

 

ISP makes bold, debt-fuelled bid.

SP Telemedia has ended a week of intense speculation by issuing a $373 million bid for PIPE Networks.

The bid covers both PIPE's national dark fibre network and PPC-1 submarine cable assets.

PIPE founder and chief executive Bevan Slattery has also signed a 12-month contract to be employed by SP Telemedia.

SP Telemedia company secretary Stephen Banfield told iTnews that the two companies have been in discussions for "a long time", and that SP Telemedia's ambition was always to acquire PIPE outright.

The deal values PIPE Networks at $6.30 a share, which is a 15 percent premium to PIPE's average weighted price over the last three months and a 29 percent premium to PIPE's average weighted price over the last six months. 

Debt funding

Banfield said SP Telemedia would fund the acquistion through debt funding. The company has until 7pm on December 18 to secure funding for the deal. 

SP Telemedia has $58 million debt remaining from the $150 million borrowed from ANZ Bank for the merger of TPG and Soul.

Banfield said ANZ was "broadly supportive of the transaction" and would be likely to offer a second round of acquistion debt funding.

If SP Telemedia is unable to provide the necessary finance by 6pm on December 18, PIPE will have the right to abandon the deal without paying a $3.7 million break fee.

Bringing more customers 'on net'

SP Telemedia stands to benefit from PIPE's extensive dark fibre assets that connect carriers, ISPs and data centres on the Australian mainland.

"PIPE's extensive metropolitan dark fibre network will increase SPT's capabilities as a data communications provider," SPT executive chairman David Teoh said.

"In addition, PPC-1 gives us a competitive advantage with access to international bandwidth, allowing us to offer highly attractive products to both existing and new customers.

"We expect synergies to flow by bringing more SPT customers 'on-net', as well as enhancing our corporate offering and delivering exciting new products to our customers."

Both companies have released three simultaneous trading halt announcements over the past week whilst discussing and negotiating the proposal.


SP Telemedia makes $373m bid for PIPE
 
 
 
Top Stories
Matching databases to Linux distros
Reviewed: OS-repository DBMSs, MariaDB vs MySQL.
 
Coalition's NBN cost-benefit study finds in favour of MTM
FTTP costs too much, would take too long.
 
Who'd have picked a BlackBerry for the Internet of Things?
[Blog] BlackBerry has a more secure future in the physical world.
 
 
Sign up to receive iTnews email bulletins
   FOLLOW US...
Latest Comments
Polls
Which is the most prevalent cyber attack method your organisation faces?




   |   View results
Phishing and social engineering
  70%
 
Advanced persistent threats
  3%
 
Unpatched or unsupported software vulnerabilities
  12%
 
Denial of service attacks
  6%
 
Insider threats
  10%
TOTAL VOTES: 710

Vote