Aussie Broadband goes to court to keep Superloop stake

Aussie Broadband has commenced proceedings in the Federal Court to keep its recently acquired 19.9 percent stake in Superloop, after a potential foreign regulatory hurdle to the size of the stake emerged.

Superloop had directed Aussie Broadband to reduce its interest in the company back to 12 percent, because owning anything larger requires approval from the Singaporean telecommunications regulator, the Info-communications Media Development Authority (IMDA).  

Aussie Broadband is seeking an injunction to overturn Superloop’s order to slash the stake. It took the stake last month as part of an unsolicited $466 million buyout proposition for Superloop.

According to Superloop, the 19.9 percent stake infringed its constitution, which requires IMDA’s approval before share purchases above the threshold. 

The “constitutional restrictions” are “aimed at ensuring that Superloop's wholly owned subsidiary in Singapore complies with its legal obligations” and is not at risk of IMDA cancelling its licence. 

After turning down Aussie Broadband’s “non-binding indicative offer”, last week Superloop released notice requiring Aussie to sell back 38 million of the shares that it purchased before the takeover attempt. 

Superloop said that its competitor’s “legal advisers…. sought to characterise [the] breach as… merely ‘potential, technical non-compliance’” and “inadvertent,” but noted that Aussie’s acquisition of Symbio last November “required IMDA approval under the same statutory regime.”

Aussie Broadband countered [pdf] that “relevant Singaporean legislation contains a framework for the IMDA to assess acquisitions made without prior IMDA approval” and it “is providing the required information for the IMDA to make its assessment pursuant to that framework.”

The injunction is the latest clash between the two telcos.

Since the unsolicited takeover bid, Superloop has lured one of Aussie Broadband's largest wholesale customers, Origin Energy, away on an exclusive six-year contract.

Roughly 130,000 Origin broadband customers will migrate off Aussie Broadband’s network during the 2025 financial year, Superloop revealed [pdf] on the same day that Aussie “received unexpected notice” [pdf] that the retail energy provider would not renew their three-year year white label agreement.