James Spenceley’s second child, a daughter, had just been born when TPG Telecom snatched a 19.9% stake in Perth-based Amcom so it could block a merger deal with Vocus.
Spenceley, the founder and CEO of Vocus, thought the merger, the one big deal which would create a platform to really make a difference in Australia’s telco market, was over.
Up to that point the process had been friendly, with Spenceley’s company buying a 10% stake in Amcom Teleommunications, a residential broadband service provider, in October 2014.
The companies then got to know each other and decided a merger would create something special, a key player in the corporate market with a good national fibre network.
“Once TPG bought in, I felt it was possibly an insurmountable task,” he told Business Insider. “A blocking stake like that has never been defeated in Australia.”
He was in and out of the maternity hospital room, getting to know his new daughter but also taking calls about the merger.
“My wife says I have an amazing propensity of dealing with stuff but I reckon I was pushing it at that point,” Spenceley says.
“It would be madness to think we were still looking good. But we forged ahead and we said that if we were going to go down we were going to go down fighting to the last shareholder.”
Spenceley set a goal of contacting every single Amcom shareholder at least twice, trying to convince them to stay with the merger and ignore TPG which hadn’t made a competing bid and was itself trying to get bigger by buying another telco, iiNet.
“To be honest, right up until the vote was revealed, I wasn’t expecting to win,” he says.
In the end, the voting was tight but the shareholders stayed with the merger, winning 99.8% of the non-TPG votes. The combined company is now worth about $1.3 billion.
TPG hasn’t revealed publicly the reason for trying to stop the deal but Spenceley believes TPG saw the merged entity as strong competition on the corporate sales side.
“Combined, these two businesses offer a national footprint of fibre which is second only to Telstra and Optus,” Spenceley says. “A pretty amazing business we are putting together. We are in a sweet spot for corporate communications.”
When TPG bought into Amcom, the Vocus share price went up, a confidence vote from the market.
Spenceley also has benefited from TPG’s blocking attempt.
“It’s done a huge amount – and this is probably one of the unwanted side effects for TPG — for brand awareness for Vocus,” he says.
“Why did TPG spend $100 million trying to stop Amcom and Vocus from merging? And the answer is that what we are putting together is something really special.”
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