Uniti Wireless move to take over Spirit Telecom rejected

Shares in recently-listed Adelaide internet services provider Uniti Wireless have slumped after its takeover offer for a Melbourne rival was rejected.

• Uniti confirms Spirit move
• M&A focus under Uniti director and investor Vaughan Bowen
• ASX questions Uniti’s version of events
• Mystery surrounds sudden exit of Uniti co-founders
• Uniti lists on the ASX

Shares in Adelaide internet services provider Uniti Wireless have slumped after its takeover offer for a smaller Melbourne rival was rejected.

Spirit Telecom, also an Australian sharemarket-listed ISP, said it had rejected the offer and intends to proceed with the “normal course of its operations, including organic growth and acquisitions”.

Spirit then didn’t waste any time, moving into a trading halt in relation to its own acquisition of a “complementary unlisted business”.

Uniti Wireless shares fell as much as 15 per cent on the update.

At 11.45 AEST, Uniti shares were trading at 56c, still down than 3 per cent on Monday’s close of 58c.

Uniti, which listed on the Australian Securities Exchange on February 13 and sacked its two co-founders Che Metcalfe and Sasha Baranikov a day later, last week confirmed market speculation about its proposal to acquire Spirit Telecom.

File photo of Uniti co-founders Che Metcalfe and Sasha Baranikov. Picture: Calum Robertson.

Both companies provide wireless internet services as alternatives to the taxpayer-funded National Broadband Network.

Spirit reported first half revenues of $8.2 million, up 1 per cent, and underlying EBITDA of $362,000, but a net loss of $487,000.

Uniti’s share price has more than doubled since its listing price of 25c, with most of the gains being made since mid-March.

Significant announcements from Uniti in that time have included the employment of Vaughan Bowen, formerly of M2 Telecommunications and Vocus Group, who plans to grow the company through mergers and acquisitions.

He also invested more than $900,000 in Uniti.

Uniti chief executive Michael Simmons, who has faced ASX scrutiny over his rationalisation program that led to the sacking of Uniti’s founders, has previously worked in leadership positions in M2 and Vocus.

Last week, Uniti also gained a new substantial holder in Cornish Group Investments, the investment vehicle of Philip Cornish, who established Vodafone Australia in 1990.

Cornish Group bought 10 million shares in Uniti.

Mr Cornish and Mr Bowen are both on the board of the Telco Together Foundation.