The Amaysim (ASX:AYS) share price has rocketed up today. Here's why.

The amaysim share price will be one to keep an eye on following its announcement regarding the sale of its mobile business.

Bernd Struben

Author bio Bernd Struben earned his BA in economics from the University of Michigan in 1991, with post-graduate studies in environmental economics at the University of Connecticut. Over the years he’s written about and analysed the tourism industry in the Caribbean; Europe’s commercial real estate markets; and, since moving to Australia in 2010, global and Aussie share markets. Bernd studies geopolitical and macroeconomic trends, alongside sector and company specific data, to gauge what he believes could be tomorrow's best investments. In his free time, you might find Bernd at the beach with his family or working on his next science fiction novel. Areas of expertise Australian and global share markets Macroeconomic and geopolitical trends Real estate Education Economics, University of Michigan Favorite investment quote "The four most dangerous words in investing are: 'This time it's different." — Sir John Templeton

Published November 2, 2020 10:53 am AEDT

The Amaysim Australia Ltd (ASX: AYS) share price has rocketed up 10.45% to 74 cents today. This follows the company's announcement this morning of an deal to sell its mobile business to Optus.

rocketing asx share price represented by man riding golden dollar sign speeding through clouds — Image source: Getty Images

Second major asset sale in 2 months

On 31 August Amaysim announced it was selling its subscription energy business, Click Energy, to AGL Energy Limited (ASX: AGL) for $115 million.

The final net proceeds from this sale were $51.9 million. That figure is after the company repaid $53.1 million of bank debt and transaction costs.

Today's announcement regards the sale of Amaysim's remaining operations, its mobile business, to Optus Mobile Pty Limited for a cash consideration of $250 million.

What's in it for Amaysim's shareholders?

The company estimates somewhere between $207–$226 million will be distributed to shareholders. That includes the final net proceeds from the sale of its Click Energy business. This would represent 67–73 cents per share.

Amaysim expects there will be additional value from franking credits, up to around 11 cents per share, attached to "certain components of the distribution".

Amaysim CEO Peter O'Connell said:

We are delighted to announce the proposed sale of Amaysim's mobile business to our long-term strategic wholesale partner, Optus. Amaysim has a first-class team that cares for its customers, which Optus has recognised through this acquisition. We believe Optus, with its deep knowledge of our operations, is well-placed to look after our customers and staff and take the growth of the business to the next level.

What's next for Amaysim shares?

The sale of Amaysim's mobile business remains conditional on shareholder approval. The company expects to hold an extraordinary general meeting in January 2021. It states that the sale to Optus is not subject to any additional due diligence of financing conditions. The sale agreement has received all needed regulatory ticks of approval.

If shareholders vote to approve the sale, amaysim will offer transitional services to Optus for a 3-month period. Following that period, amaysim would then begin de-listing from the ASX and winding up.

Amaysim's board is unanimous in recommending shareholders vote for the sale of its mobile business, barring a superior proposal.

The Amaysim share price closed at 67 cents yesterday and is up 10.45% at 74 cents in early trade today.

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