Local telco roll-up continues as Aussie Broadband makes $305 million play for rival.

Robert Clark, Contributing Editor, Special to Light Reading

February 26, 2024

2 Min Read
Businessman showing thumbs-down gesture
(Source: Tero Vesalainen/Alamy Stock Photo)

Australian broadband provider Superloop has rejected as "opportunistic" a takeover offer from rival Aussie Broadband.

Aussie Broadband offered A$0.95 for each Superloop share – a premium of 8.6% over the Friday closing price, valuing the company at 466 million Australian dollars (US$305 million).

Superloop's stock jumped in early Monday trading and finished the day up 14.3%.

The Superloop board said the offer "fundamentally undervalues" the company and that it will "not engage" with Aussie Broadband over the transaction.

In its bid, Aussie Broadband, a small integrated telco, said the price was a 33% premium on Superloop's average weighted price of the past three months.

It said the combination of the two would create a scale player with more than 1 million broadband subs, a broader footprint and greater efficiencies through elimination of network duplication and other costs.

The bid is the latest in the roll-up of smaller Australian telcos over recent years. Just this week, Aussie Broadband's acquisition of cloud-based unified communications provider Symbio is due to complete – a deal it clinched last October after outbidding Superloop.

Active in M&A

Superloop, founded by telco entrepreneur Bevan Slattery in 2014, has been an active participant, too. In the past two and a half years, it has picked up MyRepublic's Australian business, fiber player Vostronet, white label firm Acurus and ISP Exetel, while also disposing of some Asian assets for A$125 million ($81.9 million).

Related:Aussie Broadband in A$273M tilt at Symbio

Both companies have just posted healthy interim results.

Superloop last week reported underlying EBITDA of A$23 million ($15 million), up 83%, with revenue 33% higher to A$198 million ($129.7 million) and free cash flow up nearly fourfold. It has 408,000 broadband customers.

Aussie Broadband announced a 14% higher net profit of A$9.8 million ($6.4 million) in its first-half result on Friday.

Revenue improved 18% to A$445.9 million ($292.2 million), driven by 15% growth in its core residential broadband business and a 53% expansion of its wholesale segment. It raised full-year EBITDA guidance to A$105 million-A$110 million ($68.8 million-$72 million), up from A$100 million-A$110 million.

Aussie Broadband said the Symbio acquisition will close on February 28.

It paid A$262 million ($171.7 million) for the business, which it says will run as a standalone in the short term. Executive Director Michael Omeros has been appointed CEO. Symbio's current CEO and co-founder, Rene Sugo, will remain as adviser.

The Aussie Broadband share price closed 1.99% higher at A$4.62.

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About the Author(s)

Robert Clark

Contributing Editor, Special to Light Reading

Robert Clark is an independent technology editor and researcher based in Hong Kong. In addition to contributing to Light Reading, he also has his own blog,  Electric Speech (http://www.electricspeech.com). 

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