Aussie Broadband shares are falling on a big sale today

It’s been a fairly happy day for the S&P/ASX 300 Index (ASX: XKO) and most ASX 300 shares so far this Tuesday. At the time of writing, the ASX 300 has risen by a comfortable 0.14%, putting the index at around 7,860 points. But let’s discuss what’s going on with Aussie Broadband Ltd (ASX: ABB) shares.

Aussie Broadband shares don’t seem to be benefitting from the optimism we are seeing across the broader share market today. At the time of writing, the ASX telco has tanked by almost 1%, down 0.98% at $3.54 a share.

It’s possible that a new ASX announcement out of Aussie Broadband is a factor here.

This morning, just before market open, Aussie Broadband gave investors an update regarding the saga surrounding the purchase of its fellow ASX telco Superloop Ltd (ASX: SLC)’s shares.

The relationship between Superloop and Aussie Broadband has been an interesting one to observe in 2024 to date.

Over February and March, we saw some ASX drama after Aussie Broadband lobbed a takeover offer at Superloop shareholders.

In late February, Aussie offered a non-binding indicative proposal to Superloop investors. It was an all-scrip offer, putting up 0.21 Aussie Broadband shares for every Sueprloop share owned. A few days later, Superloop rejected the offer, calling it ” opportunistic” stating that it “fundamentally undervalues Superloop”.

However, this takeover offer was quickly overshadowed by the revelation that Aussie Broadband had acquired a 19.9% stake in Superloop itself.

Aussie Broadband buys and sells Superloop shares

The company didn’t respond well to this development and launched legal proceedings against Aussie in Federal Court. Superloop argued that Aussie Broadband’s share buy-up wasn’t permitted under its constitution because it occurred “without the prior approval of the Info-communications Media Development Authority (IMDA) in Singapore”.

It asked Aussie to reduce its stake to under 12% within ten business days.

Aussie Broadband initially responded by calling the purchase “inadvertent”, but stated that it would appeal the legal proceedings. This was unsuccessful.

However, today, the company has given investors an update.

In an ASX filing this morning, the telco confirmed that it had adhered to Sueprloop’s request, and sold off some of its Superloop stock. Here’s what the statement said:

Aussie Broadband Limited… refers to its acquisition of a 19.9% relevant interest in Superloop… which was announced on 26 February 2024 and the subsequent notice from Superloop directing ABB to dispose of its legal and beneficial ownership in a number of shares in Superloop, which was announced on 18 March 2024.

On 1 April 2024, ABB entered into an agreement to sell 37,621,056 fully paid ordinary shares in Superloop at a sale price of $1.31 per share. Following the sale, ABB has a 11.99% shareholding in Superloop.

So it appears this puts to bed the legal drama that has swirled around these two companies over the past month or so. This action by Aussie Broadband might well explain why investors are a little cool on this telco’s shares during today’s trading thus far. But let’s see if this is indeed the end of this ASX telco saga.

The post Aussie Broadband shares are falling on a big sale today appeared first on The Motley Fool Australia.

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More reading

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• Why Aussie Broadband, Liontown, Metals Acquisition, and Seek shares are falling
• Aussie Broadband share price falls as legal proceedings commence against Superloop
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• Why Arafura Rare Earths, Core Lithium, Goodman, and Superloop shares are falling today

Motley Fool contributor Sebastian Bowen has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended Aussie Broadband. The Motley Fool Australia has recommended Aussie Broadband. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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