- In response to an article by The Australian, Aussie Broadband (ABB) has confirmed it is in discussions with Over The Wire (OTW) regarding a potential takeover
- Aussie Broadband said the discussions are “preliminary and incomplete” and that no agreement has yet been reached
- The company recently raised $134 million in two separate financings, which it said would be used partly “for accretive acquisition opportunities”
- Shares in Aussie Broadband are up 513 per cent to close at $4.92 while Over The Wire entered a trading halt while it addresses the “media speculation”
In response to an article by The Australian, Aussie Broadband (ABB) has confirmed it is in discussions with Over The Wire (OTW) regarding a potential takeover.
The piece, published late on Thursday, claimed the newly listed telecommunications provider had been looking at the potential acquisition of Over The Wire earlier this year, according to unnamed sources, and is now in “exclusive discussions.”
“The discussions are preliminary and incomplete, and no agreement has been reached in relation to any transaction,” Aussie Broadband said in an announcement this morning.
“There is no guarantee that any agreement will be reached or that a transaction will eventuate.”
Aussie Broadband listed in mid-October last year at $1 per share, raising $40 million with an indicative market capitalisation of $190 million. In the 12 months since, the company’s shares have soared to just under $5, valuing it at roughly $1.1 billion.
In an update to the market earlier this week, Aussie Broadband noted the completion of an institutional placement that raised $114 million, as well as a share purchase plan that raised a further $20 million.
In addition to new business products and increased technology development, the company said the funds would also be used “for accretive acquisition opportunities,” and added in that same announcement it was continuing “to progress its M&A strategy.”
Over The Wire, meanwhile, listed in early December 2015 — also at $1 per share — raising $10 million in the process. Its share price has seen a similar increase, and last traded at $5 before entering a trading halt today while it responds to the current “media speculation.”
According to its full-year results released in August, Over The Wire — which offers a range of telecommunications, cloud and IT solutions — saw a 29 per cent increase in revenue, from $87.6 million in the 2020 financial year to $112.7 million.
The company drew attention to its acquisitions of Zintel, Fonebox and Digital Sense during the year, but made no mention any future M&A strategy. Instead, Managing Director Michael Omeros said only that Over The Wire has “the people, solutions and platform to deliver strong organic growth in the current year.”
Shares in Aussie Broadband were up 5.13 per cent to close at $4.92.