TPG confirms buying into iiNet

TPG Telecom (ASX:TPM) has confirmed it has acquired a stake in rival listed ISP iiNet (ASX:IIN).

But the operator on Tuesday said it currently has no plans regarding iiNet other than to own the holding as a strategic investment.

iiNet had earlier that day disclosed to the market that TPG now has a roughly 4.4 per cent holding in the company. This falls short of the 5 per cent required for TPG to submit a substantial shareholder notice.

TPG first became an iiNet shareholder when iiNet's former largest holder, enterprise, government and wholesale telco Amcom (ASX:AMM), decided to offload its stake.

Amcom in June sold 4.5 million IIN shares, and distributed the remaining 31 million among its shareholders, of which a TPG subsidiary is one. This gave TPG roughly 1.35 million shares.

But TPG, through two more subsidiaries, also recently acquired some 3.5 million shares in an on-market purchase, iiNet disclosed and TPG affirmed.

A study by analyst firm Telsyte published earlier this month found that both iiNet and TPG are significant influences on increasing competitiveness in the Australian broadband market.

IIN shares grew 9.13 per cent on Tuesday to $2.510, while TPM shares fell 2.14 per cent to $1.375.

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