TPG Telecom Ltd (ASX: TPG) shares were having a largely uneventful session on Tuesday until just after lunch.
After which, the telco's shares jumped 8% in a short space of time to $5.43 before being hurriedly paused from trade and then placed in a trading halt until tomorrow.
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What's going on with TPG shares?
The company has not yet explained the reason for the jump. However, a report in the AFR is likely to be what has caused the sudden excitement from investors.
According to the report, TPG and Macquarie Group Ltd (ASX: MQG) are understood to have been secretly negotiating a deal that could bring in billions of dollars and lighten the telco's debt load.
That deal would be a "multi-billion-dollar sale and leaseback of its non-mobile fibre assets with Macquarie-backed rival Vocus."
Macquarie Asset Management is understood to be working to acquire all of TPG's fibre assets barring mobile.
This wouldn't be new territory for TPG, which offloaded its mobile tower assets to Canadian pension fund OMERS last year.
That transaction delivered net cash proceeds of approximately $890 million, which the company used to repay existing bank debt. It also included a master services agreement with a 20-year term and an option for TPG to extend.
Time will tell if this is the case with its fibre assets, but it seems likely given the reports and past transactions. Luckily we shouldn't have long to wait. An announcement from TPG is expected to be made before the market open on Wednesday.
The TPG share price remains down by 16% since this time last year despite today's pop.
