Shares in Perth-based Amcom Telecommunications Ltd surged 28 per cent after it emerged as a big buyer of iiNet Ltd stock, taking 19.97 per cent of the ISP with funding from Futuris Corp Ltd.
Shares in Perth-based Amcom Telecommunications Ltd surged 28 per cent after it emerged as a big buyer of iiNet Ltd stock, taking 19.97 per cent of the ISP with funding from Futuris Corp Ltd.
The news briefly assisted iiNet's deflated share price which rose to $1.09 during trade before slumping to 89.5 cents, 4.8 per cent down on yesterday's close.
The Amcom stake, mainly bought at 83 cents a share on Monday, puts the company barely under the threshold which would require a takeover bid.
However Amcom managing director Eddy Lee played down talk of a takeover bid when contacted by WA Business News.
Mr Lee said that Amcom had sought to take a stake in iiNet during the ISP's recent five-week trading halt, but had failed to get a deal. Instead, iiNet made a placement to Sydney-based telco PowerTel Ltd. PowerTel shares dropped 2.9 per cent to $1.33 each.
Mr Lee said he believed Amcom could do a deal with iiNet to supply its fibre network that would be commercially beneficial to both parties.
"We have bought a level of shareholding where we think we can get a seat on the table and show what we can offer," he said.
Mr Lee said the stake was not intended as a blocking stake or any form of greenmail, despite the involvement of Futuris, a 30 per cent shareholder in Amcom, which has provided funding for the purchase with limited recourse to the iiNet shares.
Futuris has previously played a patient game as an investor, holding siginificant stakes around the 15-20 per cent level in various companies that were considered as takeover or merger targets.
Mr Lee said his next step was to get some clarity on the iiNet deal with PowerTel.
Travelling on a road show on the east coast, iiNet managing director Michael Malone said he also need to fully understand what Amcom sought before commenting on this new substantial shareholder.
Mr Malone said Amcom and PowerTel had fibre networks that covered most of Australia (PowerTel on the east coast, Amcom in Perth and Adelaide) but barely covered eachother, however he noted PowerTel's strength in the wholesale market.
"Between Amcom and PowerTel there is definitely a discussion to be had," he said.
