Aussie Broadband Ltd (ASX: ABB) and Superloop Ltd (ASX: SLC) shares are catching the eye again on Monday.
Last week, they were in the news after Origin Energy Ltd (ASX: ORG) terminated its deal with Aussie Broadband and signed up with Superloop.
On the day, Superloop shares were up as much as 34% and Aussie Broadband shares sank 25%.
What's going on with their shares today?
The Aussie Broadband share price is falling again on Monday and are down 4.5% to $3.39 in early trade.
This has been driven by news that Aussie Broadband has been instructed by its rival to sell a large portion of its Superloop shares immediately.
According to the release, Superloop has issued a notice under its constitution directing Aussie Broadband to dispose of 37,621,056 ordinary shares to reduce Aussie Broadband's voting power in Superloop to less than 12%.
Based on Superloop's last close price, this represents approximately $47 million worth of shares that need to be offloaded.
Superloop explained that Aussie Broadband's current level of ownership is not allowed under its constitution. It said:
Aussie Broadband recently announced that it had acquired voting power of 19.9% in Superloop. The acquisition was made without the prior approval of the Info-communications Media Development Authority (IMDA) in Singapore, as required by Superloop's constitution.
While Aussie Broadband claims the purchase was "inadvertent", Superloop isn't buying the excuse. It highlights that its rival recently dealt with the IMDA in Singapore in relation to its acquisition of unified communications-as-a-service provider Symbio. It said:
In subsequent correspondence with Aussie Broadband's legal advisers, they have sought to characterise Aussie Broadband's breach as "inadvertent", despite Aussie Broadband's recent acquisition of Symbio, which became effective in late February 2024 and required IMDA approval under the same statutory regime. They also sought to characterise Aussie Broadband's conduct as merely "potential, technical non-compliance".
Superloop has given Aussie Broadband 10 business days to sell down its holding. It adds:
Superloop takes its legal obligations seriously. Any risk of loss of a statutory licence in Singapore is a matter of concern to Superloop and its board. Accordingly, the Superloop board has determined that the appropriate response is to give a direction to Aussie Broadband under Rule 12A.5 of its constitution to reduce its shareholding to a level that is less than 12% within 10 business days.
This may complicate things for Aussie Broadband in the future if it wants to repurchase shares down the line. Superloop explains:
Superloop understands that another effect of Aussie Broadband's failure to obtain IMDA approval in advance of the acquisition is that it now cannot acquire further voting power in Superloop without the approval of the IMDA under the Code, which Superloop understands can only be granted if the IMDA is satisfied that Aussie Broadband "was not aware" of the contravention.
Superloop shares are down 3% on the news.
