- Disposal of SkyMesh subsidiary
- Proposed return of cash to shareholders
- 27 per cent discount to sum-of-the-parts valuation
Aim-traded alternative broadband services provider Bigblu Broadband (BBB:35p) has announced the sale of its Australian subsidiary, SkyMesh, to SKM Telecommunications, a new company set up by Melbourne-based fund management and advisory firm Salter Brothers. The transaction is subject to shareholder approval at a general meeting on 20 December.
The total consideration of $50.2mn (£27.4mn) includes a £15.4mn cash payment on completion, the issue of £6.8mn consideration shares which will give BigBlu an effective fully diluted holding of 24.7 per cent in SKM, up to £3.5mn of cash due 12 months post completion, and adjustments for an outstanding £1.4mn SkyMesh customer receivable. The total consideration is at the lower end of the £29mn-£36mn (49p to 61p) valuation range I outlined when I suggested buying BigBlu’s shares, at 30.5p (‘These shares could double your money in double-quick time’, 5 November 2024).