Up 7% today, why have TPG shares just been halted?

TPG is rumoured to be selling its fibre assets.

| More on:
A man pulls a shocked expression with mouth wide open as he holds up his laptop.

Image source: Getty Images

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

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.

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.

Motley Fool contributor James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia's parent company Motley Fool Holdings Inc. has positions in and has recommended Macquarie Group. The Motley Fool Australia has positions in and has recommended Macquarie Group. The Motley Fool Australia has recommended Tpg Telecom. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

More on Communication Shares

A couple stares at the tv in shock, with the man holding the remote up ready to press a button.
Dividend Investing

Why Macquarie expects this high-yielding ASX All Ords stock to charge higher AND boost its dividends

Looking for a quality ASX dividend share with strong growth potential? Read on!

Read more »

A woman sits in her home with chin resting on her hand and looking at her laptop computer with some reflection with an assortment of books and documents on her table.
Communication Shares

Is there more upside for CAR group or REA group shares?

Let's see what this broker has to say about these ASX 200 stocks

Read more »

A woman standing in a blue shirt smiles as she uses her mobile phone.
Communication Shares

3 reasons why the Telstra share price could be a top buy

I’m still calling this leading ASX share a buy.

Read more »

A businessman presents a company annual report in front of a group seated at a table
Communication Shares

Superloop and Aussie Broadband shares: insights from Macquarie's roadshow

Here’s what the broker expects from these two telecommunications companies. 

Read more »

Young woman thinking with laptop open.
Communication Shares

6% potential yield? Here's the Telstra share price and dividend forecast

Can the telco deliver strong returns?

Read more »

Delighted adult man, working on a company slogan, on his laptop.
Communication Shares

3 reasons to buy this quality dividend-paying ASX 200 stock today

A leading fund manager expects more near-term outperformance from this ASX 200 dividend stock.

Read more »

Delighted adult man, working on a company slogan, on his laptop.
Communication Shares

Macquarie initiates coverage of Superloop shares with outperform rating

The broker reckons Superloop has what it takes to soar.

Read more »

woman on phone
Communication Shares

Here's the earnings forecast out to 2029 for Telstra shares

Are further Telstra share price gains possible? Let’s consider the earnings outlook.

Read more »