Insights

Over the Wire (ASX:OTW) share price leaps 12% on Monday

Over The Wire shares are rising after receiving a takeover offer.
The post Over the Wire (ASX:OTW) share price leaps 12% on Monday appeared first on The Motley Fool Australia. –

The Over The Wire Holdings Ltd (ASX: OTW) share price has gone up around 12% in early trading.

Last week, the ASX-listed telecommunications, cloud and IT solutions provider announced that it received a takeover offer from another ASX share.

Takeover offer for Over The Wire

Over The Wire announced on 22 October 2021 that it received an unsolicited, non-binding and indicative offer from Aussie Broadband Ltd (ASX: ABB) to buy the whole business.

The offer from Aussie Broadband is an amount of $5.75 per Over The Wire share.

At this stage, the discussions between the two telcos about the offer are preliminary and incomplete. No agreement has been reached about any transaction. The company also said that there is no guarantee that an agreement or transaction will happen.

More details on the current proposal

The Aussie Broadband takeover offer is $5.75 in total per share, but it’s actually a mix of cash and shares. The ratio of cash and shares is yet to be determined.

A process deed was entered into on 16 October 2021. Aussie Broadband is being provided with the opportunity to do due diligence and negotiate transaction documentation over a period ending on 30 November 2021.

Over The Wire has agreed to certain exclusivity and notification provisions during this period.

What happens next?

Shareholders get the chance to react to this news. As mentioned, the Over The Wire share price is currently up around 12%. However, the board advised shareholders not to take any action about this proposal.

Over The Wire said it would keep shareholders involved of any other developments. It has appointed Macquarie Group Ltd’s (ASX: MQG) Macquarie Capital as financial adviser and McCullough Robertson as legal adviser.

The offer is subject to various conditions, including completing due diligence and entering into a satisfactory formal agreement.

How is the Aussie Broadband share price performing?

This morning, Aussie Broadband shares are flat. However, over the last six months it has gone up around 60%.

In a recent update for the first quarter of FY22, Aussie Broadband said that its overall broadband connections increased 11% quarter on quarter to 396,328. Business broadband connections grew 13% quarter on quarter to 39,993. Year on year, total broadband connections rose 44%.

Total connections rose 13% quarter on quarter to 576,698.

The FY22 first quarter revenue grew 11.3% quarter on quarter to $111.4 million.

Aussie Broadband said that it was expecting broadband net additions of 53,000 to 60,000 for the second quarter, including the migration of 20,000 white label services. The company said it’s typical to see a slow down over the Christmas period.

The broker Ord Minnett currently rates the Aussie Broadband share price as a buy and rated the Over The Wire share price as a buy prior to the takeover offer.

Ord Minnett thinks this deal would be a good move for Aussie Broadband’s expansion of its corporate segment.

The post Over the Wire (ASX:OTW) share price leaps 12% on Monday appeared first on The Motley Fool Australia.

Should you invest $1,000 in Aussie Broadband right now?

Before you consider Aussie Broadband, you’ll want to hear this.

Motley Fool Investing expert Scott Phillips just revealed what he believes are the 5 best stocks for investors to buy right now… and Aussie Broadband wasn’t one of them.

The online investing service he’s run for nearly a decade, Motley Fool Share Advisor, has provided thousands of paying members with stock picks that have doubled, tripled or even more.* And right now, Scott thinks there are 5 stocks that are better buys.

*Returns as of August 16th 2021

More reading

Why Aussie Broadband, Core Lithium, Cardno, and Nuix are storming higher

Aussie Broadband (ASX:ABB) share price surges 5% as acquisition talks confirmed

Over the Wire (ASX:OTW) share price halted amid possible takeover

Aussie Broadband (ASX:ABB) share price on watch amid acquisition rumours

Aussie Broadband (ASX:ABB) share price drops out on trading update and NBN gripe

Motley Fool contributor Tristan Harrison has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of and has recommended Aussie Broadband Limited and Over The Wire Holdings Ltd. The Motley Fool Australia owns shares of and has recommended Macquarie Group Limited. The Motley Fool Australia has recommended Aussie Broadband Limited and Over The Wire Holdings Ltd. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

Trade The World Anywhere & Anytime!

Mobile app platform with over 50,000 global listed securities across 12 markets (over 70% global market capitalisation), right from your Android or iOS device.

Integrated with exclusive trading idea and investment analysis tools to help you find actionable insight on virtually every financial instrument across our 12 global markets, to help you optimise your trading strategies.

Refer Your Friends

Tell your friends about Monex and gift them FREE access to our trading tools.

We respect your privacy and will only send this one email notification to your friends. 

Share With Your Friends

Share on facebook
Share on twitter
Share on linkedin

Monex Trading Tools Access and Usage Terms

The Monex Trading Tools (referred to as ‘tools’ hereafter) are available to you inside your client portal;


To activate access to the tools, you must have a verified and approved trading account and have made a deposit of at least AUD $1000.


An active and funded account with a positive trading balance is required to continue to have access to the tools;


Although the tools are available to you indefinitely, Monex Securities may at it’s discretion disable access to the tools in the future;


Monex securities reserves the right to change these terms and conditions from time to time, as it sees fit, without notice.

Important Notice
iOS & Android App - 12 International Markets & Over 70% Global Market Cap. $0 Brokerage On US Trades. Click Here!