The founder and former chief executive of iiNet Michael Malone has said today that he will not support TPG’s bid to acquire the internet service provider, and asked that shareholders to not approve the bid – despite having unanimous approval from the board of directors.
“My family and I do not believe this deal as it is structured is in the best interests of shareholders, staff or customers,” Malone told the Australian Financial Review. “Indeed, it is appallingly silent on the impact on staff and customers.”
Malone – who owns four percent of the company, and making him one of the biggest shareholders – was an initially supportive of the move when it was announced on March 13, pending consultation with his family. However, a lack of communication with the board has changed his mind.
He also wants the board to leave if the bid fails, saying that they have “run out of ideas on how to grow this great company.”
“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.
Other investors have also expressed some concern with TPG’s bid for iiNet. One of its biggest institutional investors, BT Investments Management, recently expressed disappointment and had “major reservations” with the bid.
“We are staggered the board and its advisers doesn’t see this and didn’t argue stronger for a scrip- based alternative. To have dealt these strategic assets for a bog standard 25 per cent premium is absurd,” Paul Hannan, the head of smaller companies at BT Investments, told the AFR.