Superloop rejects Aussie Broadband’s ‘opportunistic’ $466m indicative takeover bid

Superloop shares hit a two-year high after ABB picked up a near 20 per cent stake and offered a $466m takeover bid.

Aussie Broadband has put forward its intention to acquire Superloop shares at a premium. Picture: Christian Gilles/NCA NewsWire

Superloop has rejected Aussie Broadband’s “opportunistic” $466m indicative takeover, with its board finding the rival’s offer “undervalues” the company.

The listed telco turned down the unsolicited offer less than 24 hours after it was made, with the company outlining “the board does not intend to engage with ABB on the Indicative Proposal”.

“The Board of Superloop has, together with its retained financial and legal advisers, considered the offer and believes that the Indicative Proposal is opportunistic and fundamentally undervalues Superloop,” it said in a statement.

Aussie Broadband had put forward the $466m takeover bid to bolster its share of a market dominated by Telstra and Optus. The company made the move after it had acquired a 19.9 per cent stake in Superloop, purchasing shares at 95c.

The non-binding indicative proposal would have seen Superloop shareholders given ABB shares at a ratio of around one to five. The proposal implied a total value of 95c a Superloop share, or $466.6m, and would give Superloop shareholders 0.21 ABB shares for each Superloop share held.

ABB said that offer represented a 33 per cent premium compared to Superloop’s volume-weighted average price of 71c.

Superloop shares rose 14.3 per cent on Monday to close at $1.00, $.05c above ABB’s offer.

Analysts at Wilsons Advisory had also described ABB’s bid as opportunistic early on Monday, noting the 95c share price represented a 9 per cent premium to last week’s share price.

“We are not surprised at the concept of ABB bidding for SLC, but we are surprised at the timing of the bid,” analysts said, adding they expected other businesses to offer a competing bid.

A successful takeover would have brought ABB’s NBN market share to 11.8 per cent, cementing the growing telco’s place as Australia’s fourth largest NBN wholesale provider, analysts said.

The proposal arrived just months after Aussie Broadband outbid Superloop to acquire Symbio for $262m.

Symbio is a telco offering the ability to make voice calls with data and a hosting service for virtual numbers that allow people to make phone calls over Microsoft Teams and Zoom.

Superloop, which was founded by Bevan Slattery — who is also behind data centre giant NextDC — initially announced its intention to acquire Symbio on August 1, at the time offering a 19.7 per cent premium to Symbio’s closing share price of $2.38 on July 31. It stopped the race at $2.85 and pulled the pin completely when ABB offered a 10 per cent premium at $3.15 per share.

Aussie Broadband, which was founded in 2008 and is based in Morwell in the Gippsland region of Victoria, is the fifth-largest provider of broadband with over 765,000 connections.

The bid would have allowed the telco to expand its services and have access to greater reach and network infrastructure, the company said. It would also help the telco expand its wholesale offering.

“We believe the combination of Aussie Broadband and Superloop will be value accretive for both of our shareholders and, importantly, improve our positioning and customer propositions in what is a highly competitive industry,” a spokesman said.

Superloop told investors that it would continue to “double down” in 2024 with a goal double its revenue.

The telco listed on the ASX in 2015, one year after it was founded. It is advised by Luminis Partners, Barrenjoeys and Baker McKenzie.

Originally published as Superloop rejects Aussie Broadband’s ‘opportunistic’ $466m indicative takeover bid