Yesterday shares in iiNet Ltd (ASX:IIN)
dropped despite the internet service provider endorsing the decision from its largest shareholder, Amcom Telecommunications Ltd (ASX:AMM)
, to divest its entire holding.
Last week Amcom announced it has sold 4.5 million of its shares in iiNet and would distribute the remaining 31 million shares among its shareholders, pending shareholder approval.
Yesterday iiNet’s CEO Michael Malone welcomed the divestment, claiming both companies focus on different segments of the telecommunications market.
Amcom bought its majority 23.4 per cent stake in iiNet in 2006 at an average entry price of $1.14 per share.
Yesterday shares in iiNet dropped 5.96 per cent to close at $2.68.
In the first half of the 2011 financial year iiNet booked a net profit of $12.3 million.