AustralianSuper, Uni Super, Aware Super circle stake in TPG Telecom after shares freed up

Former Vodafone boss David Teoh. Picture: Getty Images

AustralianSuper, UniSuper or Aware Super are now expected to emerge with a major stake in TPG Telecom, after Australian superannuation funds recently undertook due diligence on an acquisition of part of the telecommunications service provider.

DataRoom on Monday reported that superannuation funds were the likely buyers of the shares in TPG Telecom that on Wednesday were being released from escrow, should they come up for sale.

Now it is understood that Australian super funds have been assessing a move to take a major stake.

On July 13, shares accounting for 63.8 per cent of the $11.2bn company were released from escrow. Of those, 13.7 per cent belong to former boss David Teoh.

The rest is an 11.14 per cent stake held by Hutchison 3G Australia, a stake of the same size held by Vodafone Oceania and a 27.82 per cent holding for Vodafone Hutchison.

Industry experts believe David Teoh is offloading some of his stake in the company he led. Picture: David Geraghty

Most believe that Mr Teoh is the most likely seller of a stake as he has been recently offloading shares, which his escrow arrangements have allowed.

Sources believe that Hutchison is unlikely to be a seller and UK-based Vodafone has activist investor Cevian Capital on its register which is unlikely to be in favour of the telco offloading shares at a discount.

Aware Super is an existing shareholder in TPG Telecom, so it makes sense that it would have an interest in lifting its stake. Others believe that a deal would make a lot of sense for AustralianSuper, which has plenty of cash to put to work and is keen on infrastructure-like investment opportunities.

Shares in TPG Telecom closed on Wednesday at $5.85, taking its market value to $10.97bn.

The release of the shares comes after a merger of Vodafone Hutchison Australia and TPG Telecom in 2020.

As part of this deal, Mr Teoh and his associated entities entered into an arrangement to not sell more than 20 per cent of their shares within 24 months of the implementation of the scheme of arrangement on July 13, 2020.

Teoh sold down 3 per cent in December with help from Macquarie Capital, offloading 53.1 million shares worth $335m. This was the maximum he was allowed to sell at the time.

TPG Telecom operates the Vodafone, TPG, iiNet and Internode brands.