$250m offer from Optus too good to refuse: Amaysim chief
Amaysim’s $250m sale to Optus represents a moment of poignancy for Amaysim co-founder and chief executive Peter O’Connell.
Amaysim’s $250m sale to Optus represents a moment of poignancy for Amaysim co-founder and chief executive Peter O’Connell, who said it was increasingly difficult for challenger telcos to compete in Australia’s highly competitive and commoditised communications market.
Speaking to The Australian shortly after the deal was announced on Monday, Mr O’Connell said the blockbuster proposal from Optus was too good to refuse, despite Amaysim reviewing several offers on the table.
If approved, the deal will lead to the delisting of the virtual network operator, which will continue to operate as a budget brand under Optus. Amaysim is Australia’s fourth-largest telco, with 1.2 million customers, and Mr O’Connell said it was ahead of the curve in offering plans with no lock-in contracts and the ability for customers to bring their own handsets.
Mr O’Connell said the telco industry had changed immensely since Amaysim’s inception 10 years ago, and that it was no longer viable to compete in a 5G era for an MVNO, or mobile virtual network operator, that did not control its own network infrastructure.
“We served a vital role in the telco industry, we really took on the big carriers back in 2010, and we woke them up,” Mr O’Connell said. “They had hidden charges like the plague, and huge tariffs for going over limits. We changed it, and provided a completely different mobile services, and consumers have benefited.
“Now it was time to either raise more money and go harder at 5G, or give shareholders an opportunity to see if they want to take what’s offered on the table … It’s hard for smaller MVNOs to exist, unless they serve a very distinct segment of the market in a very low-cost way.”
Amaysim shares soared 11 per cent on Monday on news of the tie-up, which has come to fruition after years of discussions dating back to at least 2016. The shares closed at 74c. The all-cash deal would result in Amaysim giving $207.2m-$225.m back to shareholders, or 67c-73c a share.
The Amaysim board has unanimously recommended shareholders accept the offer, which is expected to go to a vote at a special meeting in January.
“It’s poignant,” Mr O’Connell said. “It’s great being an independent, agile, smaller company but equally I’m very happy that the company and the staff have a plan that is secure for them.”
Optus chief executive Kelly Bayer Rosmarin said Optus would now have a budget telco to call its own, taking on Telstra with its Belong subsidiary and Vodafone, which supplies Kogan Mobile and recently launched a low-cost brand dubbed Felix.
“They’re the most successful MVNO in Australia, and we thought it was time to bring them into the family,” Ms Bayer Rosmarin said of Amaysim. “If you have a look at our other two major competitors, they all have their own in-house brands they’re competing with, and we were kind of an outlier. We’re doing very well in the tier-one segment, but it was time for us to join forces with a key strategic partner.”
Ms Bayer Rosmarin said given Australia had fallen into its first recession in nearly three decades, a growing number of consumers were now budget-driven when choosing their next telco.
“The tier-two market is growing, and it’s a market that Optus hasn’t been playing in directly,” she said. “We want to have skin in the game in that market.”
Additional reporting: Bridget Carter
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