Shares of Amcom Telecommunications Limited (ASX: AMM) have skyrocketed 19% this morning, climbing to a high of $2.76 after the company released the results from its Scheme Meeting yesterday.
So What: In a historic turnout, Amcom's shareholders voted in favour of the proposed takeover by Vocus Communications Limited (ASX: VOC), despite the fact that rival TPG Telecom Ltd (ASX: TPM) had built a 19.9% blocking stake in the business.
Amcom said that a total of 234.7 million shares were voted at the meeting, with 77.2% voting for the transaction and 22.8% voting against the resolution. Excluding TPG's stake, a massive 99.8% of votes were cast in favour of the scheme with the vast majority of investors obviously recognising the natural synergies that will be established by joining the businesses together.
Indeed, virtually nobody could have predicted this result, given the strategic blocking stake that TPG Telecom had recently built. More than 75% of voters were needed to get the transaction across the line which was always going to be unlikely given that voting is not compulsory.
Amcom's management played a key role in the deal's success, having taken it upon themselves to contact shareholders to encourage them to vote in favour of the transaction. Vocus should also be given credit for selling its 10% stake in order to free up more shares for voting purposes, given that the company would not have been allowed to participate in the vote.
Shareholders of Vocus obviously also recognised the synergies that will be realised from the deal with the company's shares rallying 3.6% on the news.
Now What: Amcom shareholders will receive 0.4614 new Vocus shares for every Amcom share held at the record date, which is expected to be on 1 July 2015. The fact that Vocus is acquiring the business with scrip is great for Amcom shareholders in that they will be able to enjoy the benefits and future growth of the new, combined entity.
Before the merger can be implemented however, the Scheme must first be approved by the Federal Court of Australia which is scheduled for 11:00 am (Perth time) on Tuesday, 23 June 2015. Regardless, yesterday's outcome was a huge win for Amcom and Vocus shareholders, and one that will go down in the mergers and acquisitions history books.
