SYDNEY: Aussie Broadband Limited (ASX:ABB), one of the leading broadband providers in Australia, has made a non-binding offer to buy out its rival Superloop (ASX:SLC) in an all-share transaction.

The proposal values Superloop at $0.95 per share, based on the last closing price of ABB shares ($4.53 on 23 February 2024). This represents a 33.2% premium to the 3 month volume-weighted average price (VWAP) of Superloop shares ($0.71).

Under the proposed deal, Superloop shareholders would receive 0.21 ABB shares for each Superloop share they own. ABB said the offer would deliver several benefits for Superloop shareholders, such as:

An attractive premium for their shares;

Participation in the future value creation of the combined business through synergies; and

Improved liquidity in their shares.

ABB also said the merger would create a scale player in the Australian broadband market, with more than 1 million subscribers, greater network reach and infrastructure, and enhanced product offerings and capabilities. The combined entity would also have a strong wholesale segment, well positioned for growth through scale and investment.

The offer is subject to several conditions, including:

Completion of satisfactory due diligence by ABB;

Execution of a Scheme Implementation Deed (SID) by both parties; and

Unanimous recommendation from the Superloop Board (subject to no superior proposal and independent expert’s opinion).

ABB noted that there is no certainty that the offer will result in a transaction.

In addition, ABB has acquired a 19.9% stake in Superloop at $0.95 per share in cash.