M2 makes $1.5 billion play for iiNet to start bidding war

Melbourne-based telecommunications provider M2 has reportedly outbid TPG Telecom by $100 million for the acquisition of internet service provider iiNet, creating a potential bidding war between the two rival telcos.

Fairfax reports iiNet’s board considered M2’s all-scrip bid over the weekend, in order to determine whether it was better than the $1.4 billion all-cash bid made by TPG in March.

According to Fairfax, M2’s bid valued iiNet significantly higher than its rivals, after shareholders had hit out at TPG’s valuation, labelling it as ‘absurd’.

iiNet must notify TPG of any significant competing offers, giving TPG three days to make a counter-offer, according to the report.

M2, the owner of Dodo Internet and iPrimus, has previously been linked to talks with iiNet about a possible merger. If M2 acquires iiNet, it will be Australia’s second largest telco behind Telstra.