Unusual share price fluctuations have forced junior telco Eftel (EFT) to acknowledge it is in discussions with an unidentified third party about a potential transaction. The stock was placed into a trading halt Friday morning before the markets opened. Company management issued a statement about its discussions shortly after.
The moves followed a day of unusually heavy trading in the stock which saw its price surge from $0.27.5 to $0.39.5, despite having basically flat lined during the previous week.
According to the statement, “The company has been in discussions with another party in relation to a potential transaction. It is possible that if rumours where to circulate in respect to these discussions it could give rise to the volatility experienced today (March 14, 2013) although until late today the company had no reason to believe that the confidentiality of those discussions had been breached.”
Eftel’s company secretary John Horan went on to say the discussions with the third party were not sufficiently advanced to require public disclosure but then added this point, “However we anticipate an announcement will be able to be made in the next two trading days (whether to confirm a transaction, or that there have been discussions and no transaction has eventuated).”
Eftel generated revenues of over $32 million in the first six months of the year with an underlying EBITDA of just under $2.2 million for the half, according to its most recent financial report.
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