7 April 2008
The merger of SP Telemedia Limited (ASX: SOT), the telecommunications company that trades as SOUL, and TPG Holdings Limited, one of Australia's leading internet service providers, becomes effective today, following approval by SP Telemedia shareholders at a general meeting held in Sydney. Completion of the transaction will be on 22 April 2008.
The combined business has one of Australia's largest DSLAM networks, a 700,000-strong customer base and experienced management. Plans to integrate the two businesses and their networks are already well advanced; and these will create opportunities to increase network traffic, bundle and cross-sell products, reduce future capital and operational costs, and improve cash flow.
Mr Robert Millner, who will retire as chairman of SP Telemedia but remain a non-executive director, said: 'The merger of SP Telemedia and TPG has created one of Australia's largest and most profitable telecommunications companies, well placed to participate in any further industry consolidation. The acquisition of TPG will be earnings per share accretive in FY2009 and forecast EBITDA for the year is expected to exceed $100M. FY2008 earnings will be affected by one-off integration costs.'
Mr David Teoh, who will become executive chairman of SP Telemedia, said: 'The merged business is in an excellent position to continue the strong growth achieved to date by TPG. Through combining SP Telemedia's extensive IP voice, video and data network and mobile and business product capability with TPG's 257 DSLAM network and broadband customer base, we will have significant opportunities to increase competitiveness and expand market share.'
After completion of the Shareholders meeting all the directors of SP Telemedia, other than Mr Robert Millner and Mr Denis Ledbury, resigned their positions and Mr David Teoh Mr Alan Latimer and Mr Joseph Pang were appointed directors of the company. As announced in February, SP Telemedia shareholders on the register at 17 April 2008 will receive a fully franked special dividend, including the interim dividend, of 2.4 cents per share, payable on 22 May 2008. This dividend will not be paid on shares issued as consideration for the acquisition of TPG.
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