The corporate watchdog is expected to look into recent trading in shares of junior telco Inabox after the company admitted dealings in its shares may have been based on information which was not available publicly.

A spokesman for ASIC said it did not comment publicly about investigations it undertakes, although the admission by Inabox that some recent trading in the company’s shares being based on inside information would be likely to trigger a review.

Shares in Inabox (ASX:IAB) were pushed to their highest levels since late last year amid speculation of corporate deal-making after a lengthy period of underperformance.

After prompting by the Australian Stock Exchange, Inabox Wednesday confirmed that the recent spike in its share price may have been due to “use of confidential and market sensitive information which is not generally known”.

Trading in the shares ran up from lows of around 38c late last month — and they gained another 15 per cent today to hit 68c just after 3pm AEST.

Inabox said in an ASX statement it was engaged in a range of talks over either the sale of some assets, or the entire company.

It decided to confirm that talks were underway in “the interests of maintaining a fully informed and fair market for its securities”.

Inabox Group shares (ASX:IAB) over the past year.
Inabox Group shares (ASX:IAB) over the past year.

“Inabox has received a number of informal approaches from parties interested in a range of possible transactions which have included the possible sale of the entire company as well as the possible sale of the Company’s operating businesses separately,” the company said.

Interest in the company was due to its shares trading at historical lows “and market dynamics which continue to drive industry consolidation”, it told investors in a statement this morning.

“The sale of one or more of the company’s businesses … could potentially unlock significantly more value for shareholders than has been reflected in the recent price-range of the company’s shares.”

Discussions were “preliminary and confidential”, it said — with no certainty a deal would be done.

An earnings downgrade coupled with modest underlying earnings prompted sellers to punish the shares late last year. They slumped to below 40c — well clear of the highs then of around $1.

Inabox provides a range of hosted telecom services, although the suboptimal scale of some of its operations has hampered its ability to get earnings traction.