Superloop rejects 'opportunistic' Aussie Broadband bid

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.