iiNet chairman Michael Smith has admitted the company is "seriously concerned" about how low-cost operator TPG might handle iiNet's culture should the proposed merger of the two businesses go ahead.
Smith has been battling shareholders and customers alike in the week and a half since TPG announced its intention to take over iiNet for $1.4 billion.
Customers have raised strong concerns that iiNet's focus on customer service - and customer advocacy in areas outside its direct lines of operation - will be eroded once it merges into the famously cost-focused TPG.
Both iiNet and TPG have sought to downplay the concerns: TPG CEO David Teoh has said he plans to retain the brand, while iiNet chairman Michael Smith has said Teoh would be silly to mess with a model that has proven to be financially beneficial.
But Smith today said he couldn't pretend iiNet wasn't worried about the potential change to the brand post-merger.
"We are all hand on our heart seriously concerned that on the basis this deal proceeds, [it needs] to remain great for staff and customers," he said.
"I can't pretend we aren't seriously concerned about it.
"Whatever we might like to think, there's clearly some risk with this, regardless of who the purchaser is."
But TPG was "paying a large premium to acquire [iiNet's] special value", Smith said.
"They're not going to run it into the ground.
"I just can't see how [Teoh] could get value out of that very large number - $1.4 billion - without doing all he can to preserve that."
Despite iiNet's board recommending a vote in favour of the deal - which would create Australia's second largest broadband provider with combined revenues of $2.3 billion - some shareholders have reacted angrily to what they say is a lack of communication from directors.
iiNet founder and former CEO Michael Malone joined the chorus of dissent today, calling on fellow shareholders to reject the takeover bid.
Malone - who owns around 4 percent of the ISP - had previously supported the deal, but today said a lack of communication from iiNet's board and further consideration of the offer had turned him off the proposal.
"My family and I do not believe this deal as it is structured is in the best interests of shareholders, staff or customers," he said in a statement to media.
"Indeed, it is appallingly silent on the impact on staff and customers."
He said iiNet needed a sweep-out of the current board rather than to offer itself for acquisition.
"Management is constrained by a board that is consumed by compliance instead of growth. I ask shareholders to put forward entrepreneurs for the board who reflect the culture," he said.
"I ask that if this deal is defeated, then the current board stand aside. They have run out of ideas on how to grow this great company. Leave."
The iiNet board said in a statement it was "very disappointed" by Malone's comments.
"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.
"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," the board said in a statement.
"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."
Malone and a number of other shareholders are holding out hope that a rival offer from the likes of Optus or M2 will arise, or that they can pressure TPG into offering better terms for acquisition.
Smith today apologised for the delay in communicating to shareholders. The board decided to wait until this week - a week and a half after the offer was made - to make formal communications to shareholders.
"I apologise for this delay, but given the scheme will not take place until June 15, we felt we needed to attend to other matters relating to the offer last week, and of course with a view to staff and customers. And then we would be looking at shareholder communications this week," he said in a media call.
"We've been available and responsive to calls from shareholders between the announcement and now."