Aussie Broadband and Superloop shares fall on regulatory breach
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More news: Shares in telco rivals Aussie Broadband and Superloop dipped in early trading on the ASX after Aussie Broadband was told it had failed to seek the relevant regulatory approvals before acquiring a 19.9% shareholding in Superloop last month.
At 10:50am AEDT, Aussie Broadband shares were down 3.4% to $3.43 while Superloop shares were trading 6% lower at $1.18.
Superloop directs Aussie Broadband to reduce shareholding
The news: Aussie Broadband has been told to reduce its shareholding in Superloop after it acquired too many shares without consent.
The numbers: On 26 February 2024, Aussie Broadband said it had acquired a 19.9% stake in Superloop at 95 cents a share, a 33.2% premium to Superloop's volume-weighted average price over the previous three months.
Following this, Aussie Broadband said it received a notice from Superloop on 15 March directing the company to reduce its share ownership to less than 12% within 10 business days.
The context: Under Superloop's constitution, a person or company must not control between 12% and 30% of the voting power, without prior written approval of the Info-communications Media Development Authority of Singapore (IMDA).
The provision is derived from regulatory requirements relating to the telecommunications licence held by Superloop's Singapore-based subsidiary Superloop Singapore.
Aussie Broadband said its failure to comply with Superloop's constitution at the time of acquiring the 19.9% interest was "inadvertent" and it notified IMDA of the acquisition as soon as it became aware of the requirement. Superloop said the IMDA would only grant consent if it was satisfied that Aussie Broadband "was not aware" of the contravention.
Aussie Broadband noted that prior to receiving the reduction notice from Superloop, it provided Superloop with an enforceable undertaking not to exercise any voting rights in relation to its 'excess shares' until the IMDA made an assessment on the acquisition.
Meanwhile, Superloop said that Aussie Broadband's legal advisers have "sought to characterise" the breach as "inadvertent", and the company's conduct as "potential, technical non-compliance", despite its recent acquisition of Symbio requiring IMDA approval under the same statutory regime.
Elsewhere, Superloop announced a six-year broadband contract with Origin Energy last week, replacing Aussie Broadband as the energy giant's wholesale internet services provider.
The sources: ASX announcement, ASX announcement
