Aussie Broadband cops new blow in Superloop takeover bid

Telecommunications group Superloop wants rival Aussie Broadband to sell down its 19 per cent stake after rejecting its $466m takeover bid.

Aussie Broadband has been directed to sell down its major stake in Superloop within 10 business days.

Superloop has lashed out at suitor Aussie Broadband, demanding it sell down its 19 per cent stake in the telco company after rejecting its $466m takeover bid.

The telco handed its rival a notice late on Friday, which claims that ABB failed to seek approval before purchasing a 19.9 per cent stake in the company last month.

ABB picked up the stake prior to lobbing the takeover bid, one that Superloop rejected in less than 24 hours, describing it as “opportunistic” and one that “undervalues the company”.

Superloop has delivered ABB a notice, directing the company to sell 37.6 million ordinary shares, or such lesser number as is required to give the rejected suitor voting power of less than 12 per cent to someone other than an associate of ABB within 10 business days.

The notice claimed ABB had failed to adhere to rules in its constitution requiring written consent prior to picking up a stake of 12 per cent or more.

“Superloop’s constitution prohibits acquisitions of 12 per cent or more without the requisite statutory approval from the IMDA in Singapore,” the company said in a statement.

Superloop has argued that ABB failed to seek written approval from the Info-communications Media Development Authority of Singapore prior to it snapping up one fifth of the company.

Under the constitution of Superloop, there are certain provisions regarding the acquisition of Superloop shares which derive from regulatory requirements relating to the Singapore Facilities-Based Operations (FBO) telecommunications licence held by its Singapore-based subsidiary.

Superloop said that ABB’s failure to seek approval now meant it would not be able purchase further share in the company without IMDA approval, with approval on granted should the IMDA find ABB had unintentionally purchased the 19.9 per cent stake without approval.

ABB has defended its purchase of the major stake as unintentional, noting it hadn’t complied as it was unaware it needed approval.

“ABB’s failure to comply with the requirement in the Superloop Constitution at the time of acquiring the 19.9 per cent interest in Superloop was inadvertent,” the company said in a statement.

ABB said it was considering its options in respect of the Superloop’s notice while it awaits the IMDA decision. ABB shares last at $3.55, Superloop at $1.26.

This is the second major blow dealt to ABB from Superloop in just days, after the company was able to snatch an Origin Energy contract that will see the energy supplier’s customers put on Superloop internet plans instead of ABB.

That deal was further sweetened with Superloop issuing almost 20 million shares in two tranches to Origin.