The Aussie Broadband Ltd (ASX: ABB) share price is taking off on Friday after the company confirmed it's in exclusive talks with a potential new acquisition.
Aussie Broadband is looking to buy $297 million information technology and telecommunications company, Over the Wire Holdings Ltd (ASX: OTW). Over the Wire offers data networks, voice services, internet connectivity, and technological support.
At the time of writing, the Aussie Broadband share price is $4.93, 5.34% higher than its previous close.
Let's take a closer look at the still-unfolding news out of Aussie Broadband.
Aussie Broadband share price soars on takeover talks
The Aussie Broadband share price is surging after the telecommunications company confirmed rumours it's in talks to absorb Over the Wire.
Aussie Broadband stated, "the discussions are preliminary and incomplete, and no agreement has been reached in relation to any transaction".
Over the Wire shares entered a trading halt before the ASX opened this morning. As of its last close, the Over the Wire share price is $5. The smaller telco stated the freeze was due to it needing more time to respond to the acquisition rumours.
However, Aussie Broadband beat it to the cake. The company's tentative announcement follows a $134 million capital raise – made up of a $114 million placement and a $20 million share purchase plan – in September.
At the time, Aussie Broadband said the funds were to go towards "growth by [mergers and acquisitions]", as well as new products, technology development, and, potentially, further fibre and network build.
As The Motley Fool Australia reported earlier, media speculation Aussie Broadband's talking with Over the Wire emerged last night.
Aussie Broadband has vowed to "keep the market informed in the event of any material developments".
It likely goes without saying, the Aussie Broadband share price will be closely watched until the market hears more.
