TPG boosts Amcom stake to block Vocus merger

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TPG boosts Amcom stake to block Vocus merger

Updated: Vocus CEO labels effort 'disgusting'.

Vocus Communications and Amcom will embark on a "mass offensive" to get 80 percent of the latter's shareholders to vote for a proposed merger after rival TPG last night increased its stake in Amcom to block the bid.

The internet service provider - which is also currently battling with M2 to take over iiNet - late yesterday raised its 6.7 percent stake to 18.6 percent in the final night Amcom shares were up for offer before the merger proposal goes to vote.

The company today said it intended to vote against the merger.

"TPG supports the continued operation of Amcom as a standalone business under the stewardship of the current board of directors and management team," it said in a statement.

TPG's 18.6 percent holding in the company means more than 80 percent of Amcom shareholders must front up and vote for the merger to proceed.

Vocus CEO James Spenceley admitted that while 80+ percent was a high rate for a non-compulsory vote, he told iTnews he was confident it could be achieved.

"It is going to be tough, and there are a lot of small shareholders, but it's by no means over," he said.

Amcom today said it intended to refer TPG's actions to the Australian Competition and Consumer Commission (ACCC).

"We are confused as to why TPG would want to disrupt a transaction which is demonstrably in the best interests of all shareholders, particularly when they have no intention of providing shareholders with an alternative proposal," Amcom chairman Tony Grist told investors.

"It would be disappointing to see a transaction which has received strong support from our 8000 shareholders blocked by a minority shareholder who is acting in their own interest."

Vocus and Amcom are today starting a mass communications campaign to push those of the 8000 shareholders who are yet to vote.

Spenceley declined to detail how many had already submitted their vote prior to the deadline next Wednesday.

He said the companies had received almost zero votes in the negative amongst those who had voted.

"And that's the shame of it, one anti-competitive telco is affecting the value and the future of 9000 mums and dads. It's disgusting really," Spenceley said.

It's the second time TPG has increased its stake in Amcom over the past five months - the ISP boosted its holding to 6.7 percent in November after Vocus and Amcom announced they were in discussions over a potential merger.

The deal to merge was struck in December last year, valuing Amcom at $636 million. The merger would create a national telco with assets across the east and west coast and a combined market cap in excess of $1.1 billion.

Update 12:30pm: Vocus has also separately said it will refer TPG to the ACCC.

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