iiNet confirms Netspace takeover talks | Noosa Business | Business News for Noosa, Australia

AAP

INTERNET service provider iiNet Ltd says it is discussing a takeover of rival Netspace but a decision to proceed with the transaction is yet to be made.

Shares in iiNet, Australia's third largest ISP were placed in a trading halt at $2.23 before the market opened on Thursday as it endeavoured to respond to media reports it was set to acquire Netspace for between $60 million and $75 million.

iiNet later confirmed it was in talks with Netspace, a Melbourne-based internet and fixed telephone services provider with about 80,000 business and residential customers.

"We advise that we have been in discussions with several parties including Netspace, and note that the price currently being discussed is a long way below the price range quoted in the media," iiNet said in a statement.

"However, the discussions are at an early stage and remain incomplete, and the iiNet board has taken no decision regarding the potential acquisition."

Discussions with industry participants are held regularly, often regarding potential takeovers, iiNet said.

If there is a material development from such talks, iiNet would meet all relevant disclosure obligations, it said.

iiNet shares closed one cent higher at $2.24.

Speaking when the company released its half yearly results last month, iiNet chief executive Michael Malone said the ISP was well placed to pursue growth due to its strong balance sheet.

It has nearly 800,000 subscribers, and reached its current position in the market through an aggressive acquisition strategy.