Eftel receives $44.1m takeover offer

Melbourne’s M2 Telecommunications Group has announced $248 million worth of acquisitions, including a $44.1 million bid for Perth-based internet service provider Eftel.

Eftel announced today that M2 had made an off-market takeover approach, offering 35.8 cents per share through a bid implementation agreement.

At 9:50AM, WST, Eftel’s stock was down 10.1 per cent, trading at 35.5 cents.

Eftel director Larry Kestelman said M2’s offer was an attractive value proposition for Eftel shareholders.

“The transaction is a unique opportunity to increase Eftel’s presence nationally, enhance its product and service offering to its customers, and create a combined entity that will have a strong and sustainable future,” Mr Kestelman said in a statement.

M2 is also currently in the midst of a $204 million acquisition of ISP Dodo Australia, a business which is also associated with Eftel’s major shareholders, including Mr Kestelman.

M2 said it had entered into a binding share sale agreement to acquire 100 per cent of the issued capital in Dodo Australia, for a combination of cash and scrip consideration.

The Dodo acquisition is not conditional on completion of the Eftel takeover, M2 said.

M2 said it expected the acquisitions to contribute more than $400 million in revenue and $50 million in earnings before interest, taxes, depreciation and amortisation (EBITDA) in financial year 2014.

M2 chief executive Geoff Horth said he was confident the Eftel offer would be well received by shareholders.

“The acquisitions are an excellent complement to our consumer division and combined, our business possesses an excellent capability to grow our share of both the consumer and small to medium business markets,” Mr Horth said in a statement.

“We look forward to welcoming the Dodo and Eftel teams to the M2 Group.”