M2 takeover offer - Is There Value Here?

Niv Dagan

Peak Asset Management

Good Evening, Today, we shrugged off both mediocre leads from Wall Street, as well falls in Chinese stocks to start the week with a bang… The big story of the day was one of our growth companies, MTU, which received a merger proposal from VOC At the current premium, we feel that VOC will need to raise its bid……… so could be a “takeover arbitrage” play here…… A few key points: • The deal is all-scrip where M2 shareholders receive 1.625 Vocus shares for each M2 share • Revenue of 1.8bn and EBITDA 370m in FY16E before synergies. Significant synergy potential including cost synergies of 40m per year, expected to be fully realized by FY18 • Combined market in excess of 3bn! • Vocus (VOC) already active in taking over AMM earlier in the year…. Well positioned. • MTU Board unanimously recommended shareholders to vote in favor of the scheme…. • TPG market cap of 8.812B • iiNet market cap of 1.57B We expect a higher bid to come through or a potential "counter-bid" by TPG.... Niv


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Niv Dagan
Executive Director
Peak Asset Management

Prior to founding PEAK Asset Management, Niv headed up HC Securities, spent three years growing Halifax Investments capital markets division and also worked on the wholesale desk at Macquarie Bank, servicing a wide range of institutional,...

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