At lunch on Monday, the S&P/ASX 200 Index (ASX: XJO) is on course to start the week with a strong gain. The benchmark index is currently up 0.65% to 7,464.8 points.

Here’s what is happening on the ASX 200 today:

Telstra announces US$1.6bn Digicel Pacific acquisition

The Telstra Corporation Ltd (ASX: TLS) share price is pushing higher today after announcing a major acquisition. According to the release, Telstra has teamed up with the Australian Government to acquire the South Pacific-based telco, Digicel Pacific. The two parties have agreed to pay US$1.6 billion up front and up to an additional US$250 million. This latter is subject to Digicel Pacific’s business performance over the next three years. Telstra expects the deal to be earnings per share accretive.

Mineral Resources shares jump

The Mineral Resources Limited (ASX: MIN) share price is racing higher today after announcing the restart of its 40% owned Wodgina Lithium Mine in the Pilbara region of Western Australia. Wodgina, which has been on care and maintenance since November 2019, will be restarted to produce spodumene concentrate during the third quarter of 2022. The company will initially focus on restarting one of Wodgina’s three 250,000tpa processing lines.

Pilbara Minerals shares halted

The Pilbara Minerals Ltd (ASX: PLS) share price is paused on Monday after requesting a trading halt. The lithium miner requested the halt as it prepares an announcement on a strategic transaction concerning a downstream joint venture. Not further details were provided. However, just over two years ago, Pilbara Minerals announced binding terms with South Korean conglomerate, POSCO, for the formation of an incorporated joint venture in South Korea. The joint venture intends to build and operate a 40ktpa LCE primary lithium hydroxide downstream chemical processing facility.

Best and worst ASX 200 performers

The best performer on the ASX 200 has been the Mineral Resources share price with a 9% gain. This follows news that it is restarting the Wodgina Lithium Mine. The worst performer has been the Perpetual Limited (ASX: PPT) share price with a 6% decline. This may be due to profit taking after some strong gains last week.

The post ASX 200 (ASX:XJO) midday update: Telstra’s acquisition, Mineral Resources jumps appeared first on The Motley Fool Australia.

More reading

• Telstra (ASX:TLS) share price higher following Digicel Pacific acquisition news
• Why the Mineral Resources (ASX:MIN) share price is charging higher on Monday
• Why is the Pilbara Minerals (ASX:PLS) share price halted?
• Telstra (ASX:TLS) share price on watch after announcing US$1.6bn Digicel acquisition
• 5 things to watch on the ASX 200 on Monday

Motley Fool contributor James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia owns shares of and has recommended Telstra Corporation Limited. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

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The TerraCom Ltd (ASX: TER) share price is roaring higher during late morning trade on Monday. This comes after the resource company provided investors with a coal sales update from its wholly-owned Blair Athol mine.

At the time of writing, TerraCom shares are swapping hands for 22.5 cents, up 7.14%. Just last week, its shares reached a new 52-week high of 25.5 cents before some profit-taking occurred.

TerraCom hits sales targets

The TerraCom share price is rocketing today with investors clearly happy about the way the company is performing.

According to its announcement, TerraCom is continuing to deliver a robust performance at its Blair Athol coal mine in Australia.

All cargoes containing coal from the company’s Blair Athol mine have now been fully sold until the end of January 2022.

The primary markets TerraCom services are the Japanese and South Korean energy markets and the Indian sponge iron market. The latter is made by directly reducing iron ore through the use of thermal coal in an electric arc furnace.

Coal sold from Blair Athol for the December 2021 quarter came to 575,000 tonnes. This represents an annualised run rate of 2.3 million tonnes per annum.

TerraCom is forecasting revenue of $224 per tonne in the December quarter. Should this be achieved, the operating cash margin is anticipated to be approximately $134 per tonne. Based on the 575,000 tonnes sold, the company will have operating earnings before interest, tax, depreciation and amortisation (EBITDA) of $77 million.

About the TerraCom share price

TerraCom is a resource company with a large portfolio of assets in Queensland as well as South Africa. The business is currently undergoing a growth strategy to become a mid-tier player in the coal industry.

The TerraCom share price has continued its upwards trajectory, reflecting positive investor sentiment in the company. Over the past 12 months, its shares have risen by more than 66% with year-to-date up 32%.

On valuation grounds, TerraCom has a market capitalisation of around $169.5 million and roughly 753.6 million shares on issue.

The post The TerraCom (ASX:TER) share price is up 7% on Monday. Here’s why appeared first on The Motley Fool Australia.

More reading

• BHP (ASX:BHP) share price lifts as iron ore prices rebound on Monday
• ASX 200 (ASX:XJO) midday update: Telstra’s acquisition, Mineral Resources jumps
• Here’s why the Poseidon (ASX:POS) share price is sliding today
• Here’s why the Creso Pharma (ASX:CPH) share price is leaping 9% today
• What’s going on with the 4DS Memory (ASX:4DS) share price?

Motley Fool contributor Aaron Teboneras has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

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The Poseidon Nickel Ltd (ASX: POS) share price is dropping in early trade today after the company released a key announcement on its Black Swan site.

At the time of writing, shares in the nickel mining company are changing hands at 10 cents each which is around a 5% loss from the open.

That’s a significant drop this morning after Poseidon shares started the day in the green before the jitteriness from investors crept in.

Here’s what we know from Poseidon’s camp today.

Poseidon Nickel share price slumps after exploration update

Poseidon outlined several takeaways regarding exploration and drilling progress at its Black Swan site.

It revealed two underground rigs are testing the “potential down plunge Silver Swan extensions and infilling existing inferred resources” at its Silver Swan resource drilling program.

The existing Silver Swan resources contain a total of “16kt Ni (Nickel) averaging 9.5% Ni spread over three resources”.

These are the Tundra-Mute, Peking Duck, and Fledgling-Canard resources that are each covered in detail throughout Poseidon’s update.

In addition, after Poseidon’s downhole EM program completed an up plunge of its Golden Swan site, it explained there was “no significant anomalism detected”.

Yet, it maintains that “prospectivity remains in untested areas of the Southern Terrace”.

In respect to the Golden Swan resource, there’s a delay in the finalisation of the maiden resource due to “unforeseen circumstances”.

Investors can expect results of the maiden resource at this site to be released in the last week of October, according to the company’s update.

Lastly, regarding its “Fill the Mill Strategy”, work is continuing on its Bankable Feasibility Study on a 1.1Mtpa processing plant.

The ‘base feed’ for the study is “a combination of Black Swan open pit ore and Silver Swan Tailings” to be complemented with “high grade ore from both Golden Swan and Silver Swan”.

Notably, Poseidon needs to first record a resource at its Golden Swan site to include in the base feed for the study.

What did management say?

Regarding the Fill the Mill Strategy, Poseidon Nickel managing director and CEO Peter Harold said:

The Fill the Mill Strategy for the Black Swan restart requires good confidence in our high-grade resources at both Silver Swan and Golden Swan so the mining studies can maximise the mining inventory and generate accurate mining schedules to assist in de-risking the restart.

Also touching on mineralisation finds at the project, Harold added:

New DHEM platforms have been established down plunge of the Silver Swan mineralisation and these are awaiting a geophysical crew to undertake the survey. The results of the survey could provide targets for extensional drilling. In the meantime, we have identified a good zone of mineralisation below the Black Swan open pit from previous RC drilling, undertaken in 2019, which could present an opportunity to increase the size of the pit and extend the proposed open pit mine-life. We can drill this zone from underground and will redeploy one of the underground rigs to undertake that drilling.

Poseidon Nickel share price snapshot

The Poseidon Nickel share price has delivered an outsized return of 54% since January 1, extending its gains in the last 12 months to 19%.

That’s roughly in line with the S&P/ASX 200 Index (ASX: XJO)’s return of about 21% in that time.

The post Here’s why the Poseidon (ASX:POS) share price is sliding today appeared first on The Motley Fool Australia.

More reading

• Here’s why the Poseidon (ASX:POS) share price is up 5% on Wednesday

The author Zach Bristow has no positions in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

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The Creso Pharma Ltd (ASX: CPH) share price is surging today, up 9% in morning trade.

Below we take a look at the latest acquisition news that appears to be stoking interest in the ASX cannabis share.

What acquisition was reported?

The Creso Pharma share price is leaping higher after the company reported it has entered into an asset purchase agreement for the purchase of brand and product portfolio assets owned by ImpACTIVE.

Canadian life sciences company, ImpACTIVE, is focused on CBD-based products offering anti-inflammatory relief to professional and amateur athletes.

Creso said it will acquire the ImpACTIVE Assets through a newly incorporated Creso subsidiary, Creso ImpACTIVE Ltd. Creso will pay C$200,000 (AU$217,000) in Creso Shares, valued at 11 Australian cents per share. That’s below the current Creso Pharma share price of 12 cents.

The acquisition is intended to increase Creso’s CBD offerings in the North American markets. With the ImpACTIVE products containing less than 0.3% THC (the active ingredient in cannabis that gets people “high”), the company said this will “significantly” reduce global regulatory issues.

Commenting on the deal, Creso’s executive VP of North America, Will Lay said:

This acquisition marks the first phase of Creso Pharma’s efforts to enter into the US and I am excited to be working with ImpACTIVE to integrate them into the group. We have instituted aggressive sales targets, which is expected to lead to an increase in Creso Pharma’s top line and increased its market share across North America.

Non-executive chairman, Adam Blumenthal added:

We expect that ImpACTIVE’s range of innovative products and brand ambassadors which will provide Creso Pharma with direct access to an emerging subsection of the global CBD market. The group also has established relationships with major US retail groups, which is expected to provide leverage for Creso Pharma as it seeks to grow sales of its own hemp based CBD products.

Creso Pharma share price snapshot

The Creso Pharma share price has been a stellar performer over the past 12 months, up a whopping 283%. That compares to a gain of 22% posted by the All Ordinaries Index (ASX: XAO) over the last full year.

Over the past month, Creso Pharma shares have gained 5%.

The post Here’s why the Creso Pharma (ASX:CPH) share price is leaping 9% today appeared first on The Motley Fool Australia.

More reading

• Beaten up ASX cannabis shares showing signs of life
• Creso Pharma (ASX:CPH) share price struggles despite study update
• Creso Pharma (ASX:CPH) share price jumps on new deal

The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

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The 4DS Memory Ltd (ASX: 4DS) share price is still frozen in time following the company’s extension of voluntary suspension. This will take the number of days the company will have been halted to 24 by 1 November 2021.

Currently, shares in the semiconductor developer are motionless at 13 cents a pop. It has been in this position since 8 October when the company originally entered its halt, pending the release of a technical update.

Waiting game continues

4DS Memory shareholders are anxiously awaiting the release of an announcement that has been a long time coming.

Initially, the trading halt had turned into a voluntary suspension with an 18 October deadline. However, last week, this suspension was further extended to 25 October after the company failed to provide an announcement during the originally allotted timeframe.

Well, 25 October is here and, unfortunately for nervous shareholders, a further suspension extension has come with it. As a result, the 4DS Memory share price will stay frozen for another painstaking week.

Many 4DS investors have shared their speculations on forums offering an array of differing views. However, with no official word from the company, there are no clear insights into what the pending announcement relates to.

The last technical details that investors were given weren’t so positive.

On 17 August 2021, 4DS announced details involving its third non-platform wafers and its second platform lot wafers. It highlighted that the second platform wafers had suffered fabrication issues although the update said issues were corrected with the expectation of no induced delays.

What’s upcoming for 4DS Memory share price?

At this stage, investors will be holding their collective breath for 1 November. It’s unknown whether the company will issue an announcement or whether another extension will ensue. However, that aside, the next notable event for the 4DS Memory share price aside will likely be its annual general meeting (AGM).

The company’s AGM is slated for Monday 29 November 2021.

The post What’s going on with the 4DS Memory (ASX:4DS) share price? appeared first on The Motley Fool Australia.

More reading

• 4DS Memory (ASX:4DS) share price lifts on patent update

Motley Fool contributor Mitchell Lawler has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

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The Macquarie Group Ltd (ASX: MQG) share price has been on an upward trajectory for the past few weeks.

Shares in the investment banking giant started the week’s trading at $200 apiece, which is an approximate 5% climb this past week and another record high for the company.

That’s well ahead of the S&P/ASX 200 Financials Index (XFJ) which has nudged around 2% higher in the same time.

As a result, Macquarie claims its spot on the mantlepiece as one of only 3 ASX shares jumping the gulf into the $200/share club.

What tailwinds are behind the Macquarie share price?

Over the past month, the Macquarie share price has been marching towards the ceiling, having gained around 11.5% in that time.

Macquarie stepped into the month of October by releasing a presentation to provide investors with upcoming expectations and guidance for the coming periods.

The presentation detailed the bank’s earnings outlook for the first half of FY22, where it anticipates a decrease in earnings from H2 FY21, but still a substantial increase from the same time last year.

Macquarie reckons it will recognise a jump in operating profit this quarter, underscored by the divestment of several former business segments.

Moreover, the company is firm on its positioning in the renewables space, to which it has recently pivoted into.

In fact, Macquarie has taken a serious pivot into renewables, with $2 billion in current funding on its project books and another $45 million at the helm ready to disperse into the green energy field.

Plus with evolving dynamics in energy production and consumption, the bank feels it is well-positioned to capitalise on these trends, in addition to pouncing on other opportunities in the merger & acquisitions (M&A) space in its asset management and infrastructure arms.

Can Macquarie keep on delivering?

Analysts at leading broker Jeffries are adamant the bank can certainly keep on delivering to shareholders and feels its colleagues in the field may be downplaying Macquarie’s earnings too much this quarter.

The broker reckons that the consensus view of $1.8 billion for Macquarie’s earnings in Q1 FY22 could perhaps be a little too downbeat.

It sees the figure as low on the backdrop of a hot-running natural gas and gas market, strengths in its financing business, as well as a spree of acquisitions completed on the ASX this year – all positives to Macquarie, suggests Jeffries.

As such, the broker upgraded its modelling to forecast $2.08 billion in earnings for 1H FY22 and then $3.66 billion for the entire FY22.

It also reckons that the total addressable market size in the renewables sector for the bank is “far greater than its present ($71 billion) market capitalisation” – a bullish signal, according to the broker.

It also consequently raised its price target on the Macquarie share price by 9% to $230, up from $211 at the beginning of the month.

At the current market price, this implies a 16% upside potential for investors, according to Jeffries.

Meanwhile, fellow brokers Morgan Stanley and JP Morgan are also bullish on Macquarie shares.

The former has a $240 price target on the company, whereas JP Morgan reckons investors are in for a period of earnings growth, forecasting around 15% return on equity from FY22–24 for the company.

Bringing it all together, it appears each of these brokers believes that the Macquarie share price has further legs to grow and deliver shareholder returns.

Macquarie shares have climbed 44% this year after rallying 46% in the last 12 months, setting a slue of record highs on a consistent basis in that time.

The post Macquarie (ASX:MQG) share price breaks $200 mark for first time ever, sets new record high appeared first on The Motley Fool Australia.

More reading

• Brokers name 3 ASX shares to buy today
• ASX 200 (ASX:XJO) midday update: BHP and Rio Tinto fall, Qantas higher
• Aurizon (ASX:AZJ) share price rises amid transformative $2.35bn acquisition
• Another day, another all-time high for the Macquarie (ASX:MQG) share price
• Can the Macquarie (ASX:MQG) share price hit $240 by Christmas?

The author Zach Bristow has no positions in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia owns shares of and has recommended Macquarie Group Limited. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

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The Webjet Limited (ASX: WEB) share price is has fallen 4.02% since last Monday. Though, that’s a better performance than one of its ASX travel agent peers.

Flight Centre Travel Group Ltd (ASX: FLT) has recently watched its stock plunge. The company’s share price has flopped 11.69% since this time last week.

Here’s what has seemingly caused these travel agents’ stock to trend differently.

How the wider market moved

The Webjet share price has dipped over the last week. In the same period, Flight Centre shares have plummeted. Meanwhile, the broader market has faired relatively well.

Both the S&P/ASX 200 Index (ASX: XJO) and All Ordinaries Index (ASX: XAO) have gained ~0.9% since last Monday’s close.

Webjet share price outperforms Flight Centre’s

While the Webjet share price ended the last 7 days of trade in the red, Flight Centre shares dipped significantly despite positive noises coming from Flight Centre’s management.

The first catalyst for the Flight Centre share price’s plunge seems to have been its annual general meeting (AGM).

Flight Centre’s AGM took place on Wednesday. The company’s CEO, Graham Turner, said he expects Flight Centre will return to profit during financial year 2022. Additionally, he noted Australian bookings for overseas trips were already rebounding ahead of New South Wales’, and now, Victoria’s, international reopening next month.

Despite the positive sentiments, the Flight Centre share price fell 4.5% on Wednesday.

That dip worsened on Thursday after the company priced $400 million of convertible notes. Its share price fell another 4.8% in response.

Luckily for the Webjet share price, it managed to avoid falling on the back of market announcements last week. In fact, the company hasn’t released any price-sensitive news to the ASX since August.

Right now, the Webjet share price is $6.20, 1.9% lower than Friday’s close.

The post Why has the Webjet (ASX:WEB) share price outperformed Flight Centre (ASX:FLT) lately? appeared first on The Motley Fool Australia.

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• Own Flight Centre (ASX:FLT) shares? The company is still bleeding cash, but it’s not all bad news
• These were the worst performing ASX 200 shares last week
• Qantas (ASX:QAN) share price soars to 52-week high on international travel update
• Why the Super Retail (ASX:SUL) share price is crashing today
• Why A2 Milk, Eroad, Flight Centre, and Webjet shares are sinking

Motley Fool contributor Brooke Cooper has no position in any of the stocks mentioned.

The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia owns shares of and has recommended Webjet Ltd. The Motley Fool Australia has recommended Flight Centre Travel Group Limited. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

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The Paladin Energy (ASX:PDN) share price is trading in the green on Monday after the company released its first quarter activities report.

At the time of writing, the company’s shares are 2.16% higher to 94.5 cents.

Paladin working through mine restart activities

During the quarter, Paladin Energy continued to work on the “critical-path elements” for its Langer Heinrich Mine restart plan.

Paladin Energy is looking to finalise key milestones including an updated mineral resource and ore reserve estimate, as well as the optimisation of its open-pit mining schedule.

Other key activities include the preparation of long lead contracts and procurement packages and the development of an operational readiness schedule.

Paladin Energy has continued to engage with global nuclear energy utilities companies with the intent of securing uranium term-price contracts with sufficient duration and value to drive the restart of Langer Heinrich.

The quarterly report advised no corporate debt and a cash position of US$40.5 million as at 30 September.

Management commentary

Paladin CEO Ian Purdy said the company was in a financially strong position to execute its mine restart plan and ride the resurgence in uranium prices.

With a strong balance sheet, a robust and well defined Mine Restart Plan and strong project economics, Paladin is exceptionally well positioned to take advantage of a sustained recovery in global uranium pricing.

With a growing focus on global decarbonisation, nuclear energy will continue to play a key role in low-carbon power generation.

We continue to engage with global nuclear energy utilities to secure long term contracts to underpin the restart of Langer Heinrich and ensure the project, when re-started, will deliver significant economic benefit to all of our shareholders.

Paladin Energy share price

The Paladin Energy share price has ballooned 275% year-to-date on the back of skyrocketing uranium prices.

The uranium sector has surged this year amid its potential role in secure, emission-free power generation.

Uranium prices have been propped up through Sprott Asset Management’s Physical Uranium Trust which started buying uranium off the spot market in mid-August, tightening supply.

The post Paladin Energy (ASX:PDN) share price up on work towards mine restart appeared first on The Motley Fool Australia.

More reading

• Here’s why the Paladin Energy (ASX:PDN) share price is climbing 9% today
• Which ASX 300 shares are the biggest winners and losers on Tuesday?
• Why ASX uranium shares are in focus on Tuesday
• Which ASX 300 shares are leading the way on Monday?
• Why ASX uranium shares are rallying on Monday

Motley Fool contributor Kerry Sun has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

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It has been a good start to the week for the Telstra Corporation Ltd (ASX: TLS) share price.

In morning trade, the telco giant’s shares are up 2.5% to $3.82.

This means the Telstra share price is now up 26% since the start of the year.

Why is the Telstra share price rising today?

Investors have been bidding the Telstra share price higher today after it announced a major acquisition.

According to the release, Telstra has teamed up with the Australian Government to acquire the South Pacific-based telco, Digicel Pacific.

The two parties have agreed to pay US$1.6 billion up front and up to an additional US$250 million, subject to Digicel Pacific’s business performance over the next three years. The good news for Telstra, though, is that the majority of this will be covered by the government.

Although Telstra will own and operate the Digicel business, it will only be contributing US$270 million of equity to the US$1.6 billion purchase price.

Another positive, which may be boosting the Telstra share price, is that the deal is expected to be earnings per share accretive. In fact, management estimates that it will be more accretive than a share buyback.

Telstra’s Chief Executive Officer, Andrew Penn, commented: “Telstra provided guidance to the market for FY22 at its recent full year results presentation and it also provided aspirations for FY23. These did not include any allowance for the Digicel Pacific acquisition which will further enhance our outlook depending on the timing of completion.”

Speaking of which, completion is expected to occur in the next 3 to 6 months. Though, it remains subject to Government and Regulatory approvals.

Where will the Digicel business fit in?

The release notes that once the transaction and Telstra’s corporate restructure complete, the Digicel Pacific business will become a fourth subsidiary of the new Telstra holding company.

It will be overseen by a Telstra controlled board, which will also include current owner Denis O’Brien and two independent directors.

“We understand the need to ensure this is a stand-alone business and that Telstra delivers on its commitments as part of the T22 and T25 strategies, as well as our intention to grow in coming years,” said Mr Penn.

Overall, judging by the Telstra share price performance today, the market appears pleased with the plan.

The post Telstra (ASX:TLS) share price higher following Digicel Pacific acquisition news appeared first on The Motley Fool Australia.

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• Telstra (ASX:TLS) share price on watch after announcing US$1.6bn Digicel acquisition
• Which ASX 200 dividend shares have investors been heavily trading this week?
• These 3 ASX 200 shares are topping the volume charts this Friday
• What’s been happening with the Telstra (ASX:TLS) share price this week?
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Motley Fool contributor James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia owns shares of and has recommended Telstra Corporation Limited. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

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The Over The Wire Holdings Ltd (ASX: OTW) share price has gone up around 12% in early trading.

Last week, the ASX-listed telecommunications, cloud and IT solutions provider announced that it received a takeover offer from another ASX share.

Takeover offer for Over The Wire

Over The Wire announced on 22 October 2021 that it received an unsolicited, non-binding and indicative offer from Aussie Broadband Ltd (ASX: ABB) to buy the whole business.

The offer from Aussie Broadband is an amount of $5.75 per Over The Wire share.

At this stage, the discussions between the two telcos about the offer are preliminary and incomplete. No agreement has been reached about any transaction. The company also said that there is no guarantee that an agreement or transaction will happen.

More details on the current proposal

The Aussie Broadband takeover offer is $5.75 in total per share, but it’s actually a mix of cash and shares. The ratio of cash and shares is yet to be determined.

A process deed was entered into on 16 October 2021. Aussie Broadband is being provided with the opportunity to do due diligence and negotiate transaction documentation over a period ending on 30 November 2021.

Over The Wire has agreed to certain exclusivity and notification provisions during this period.

What happens next?

Shareholders get the chance to react to this news. As mentioned, the Over The Wire share price is currently up around 12%. However, the board advised shareholders not to take any action about this proposal.

Over The Wire said it would keep shareholders involved of any other developments. It has appointed Macquarie Group Ltd’s (ASX: MQG) Macquarie Capital as financial adviser and McCullough Robertson as legal adviser.

The offer is subject to various conditions, including completing due diligence and entering into a satisfactory formal agreement.

How is the Aussie Broadband share price performing?

This morning, Aussie Broadband shares are flat. However, over the last six months it has gone up around 60%.

In a recent update for the first quarter of FY22, Aussie Broadband said that its overall broadband connections increased 11% quarter on quarter to 396,328. Business broadband connections grew 13% quarter on quarter to 39,993. Year on year, total broadband connections rose 44%.

Total connections rose 13% quarter on quarter to 576,698.

The FY22 first quarter revenue grew 11.3% quarter on quarter to $111.4 million.

Aussie Broadband said that it was expecting broadband net additions of 53,000 to 60,000 for the second quarter, including the migration of 20,000 white label services. The company said it’s typical to see a slow down over the Christmas period.

The broker Ord Minnett currently rates the Aussie Broadband share price as a buy and rated the Over The Wire share price as a buy prior to the takeover offer.

Ord Minnett thinks this deal would be a good move for Aussie Broadband’s expansion of its corporate segment.

The post Over the Wire (ASX:OTW) share price leaps 12% on Monday appeared first on The Motley Fool Australia.

More reading

• Why Aussie Broadband, Core Lithium, Cardno, and Nuix are storming higher
• Aussie Broadband (ASX:ABB) share price surges 5% as acquisition talks confirmed
• Over the Wire (ASX:OTW) share price halted amid possible takeover
• Aussie Broadband (ASX:ABB) share price on watch amid acquisition rumours
• Aussie Broadband (ASX:ABB) share price drops out on trading update and NBN gripe

Motley Fool contributor Tristan Harrison has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of and has recommended Aussie Broadband Limited and Over The Wire Holdings Ltd. The Motley Fool Australia owns shares of and has recommended Macquarie Group Limited. The Motley Fool Australia has recommended Aussie Broadband Limited and Over The Wire Holdings Ltd. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

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