The Aussie Broadband Ltd (ASX: ABB) share price is down 0.84% to $3.54 amid news the telco has launched legal proceedings in the Federal Court against competitor Superloop Ltd (ASX: SLC).
Aussie owns 19.9% of its rival telco, and yesterday Superloop issued instructions for Aussie to sell down its stake to less than 12% within 10 business days.
That would involve offloading 37,621,056 shares, which are currently worth $46.65 million based on today's Superloop share price of $1.24 (up 5.11%).
Superloop explained that Aussie Broadband's level of ownership was not allowed under its constitution because "the acquisition was made without the prior approval of the Info-communications Media Development Authority (IMDA) in Singapore …".
The Aussie Broadband share price sank on the news initially, then recovered to finish 1.14% higher yesterday.
Aussie Broadband responded to Superloop's notice by saying the purchase was "inadvertent".
Today, it lodged a notice of Federal Court proceedings seeking injunctions against Superloop's sale instruction.
In its statement, Aussie said it has submitted an application to the Info-communications Media Development Authority of Singapore (IMDA) to obtain approval for its purchase of the shares in question.
Aussie Broadband said:
ABB takes its legal obligations very seriously and will continue to work constructively to provide the IMDA with the information required to support its application for approval.
The drama follows news last week that Origin Energy Ltd (ASX: ORG) has terminated its deal with Aussie Broadband and signed up with Superloop.
On the day of that news, Superloop shares rose by 25% and the Aussie Broadband share price fell 18%.
