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% holding in the company. This falls short of the 5% 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% on Tuesday to $2.510, while TPM shares fell 2.14% to $1.375.