Superloop’s earnings upgrade puts Aussie Broadband back in crosshairs

The share price of internet provider Superloop is on a tear.

Superloop’s share price is up 3.5 per cent over five days, 13 per cent over a month, 38 per cent over six months and over 90 per cent in the past year.

Its profit guidance upgrade on Monday only added further impetus, with shares gaining over 1.3 per cent on the news.

With a stock price rising at such a rate, taking its market value to $1.5bn, industry experts say a bid for rival Aussie Broadband is a no-brainer.

Aussie, which has in the past pursued Superloop for a buyout, has a market value of $1.12bn.

With the market values at a similar size, Superloop could propose a merger using its highly valued shares.

There’s a view from some around the market that a deal does not make sense for a number of reasons, including that the cultures of the two businesses are so different.

But given where Superloop’s share price is trading, it makes sense to get a deal done and there are synergies between the two companies.

Superloop told the market on Monday that strong trading performance across the business meant its underlying earnings before interest, tax, depreciation and amortisation for the 2025 financial year are expected to be above $91m.

This is beyond its existing guidance range of $83m to $88m provided in August and represents an increase of over 67 per cent from the 2024 financial year result.

Analysts at Wilsons said in a research note that Superloop had several tailwinds over the coming months, including increased competitor churn and strong subscription growth with its partner Origin Energy.

They suggest that the guidance upgrade was likely related to organic subscriber momentum continuing to remain strong.

DataRoom earlier reported that Superloop chief executive Paul Tyler is understood to have been eyeing several acquisitions of late for the cashed-up telco, and some of the opportunities have not been insignificant when it comes to size.

At the time, a number of sources suggested a move on Aussie Broadband would be unlikely.

Aussie Broadband made a $466m buyout proposal for Superloop last year, but the offer was rejected, and the suitor later sold its 19.9 per cent stake in the target.

The takeover attempt was thwarted by Origin Energy buying a 14 per cent holding in Superloop, and blocking the prospect of any transaction.

Origin purchased the holding to partly pay for a six-year contract with Superloop to provide wholesale internet services.

Superloop has $10.9m of net cash and has finished most of its capital spending and is now generating strong cashflows.

Its last loss was still a 58.4 per cent improvement on the previous corresponding period.

Webjet request

Webjet’s announcement on Monday about the request of its suitors, BGH Capital and entities linked to activist shareholder Gary Weiss, including Ariadne, has left some scratching their heads.

The suitors are asking that at the AGM, shareholders are asked to approve a capital return of about $100m.

The online travel agency has about $100m of cash on its balance sheet and had already flagged that it was considering a move to return capital to shareholders.

BGH Capital, backed by Dr Weiss, has bid 80c a share but it was rejected and the pair control almost 15 per cent.

It comes as travel agency Helloworld has about 15 per cent.

Helloworld has not made a takeover proposal, while BGH is yet to improve on its last offer with another bid after the first offer was rejected.