Analysts are wary about iiNet

Rumours continued to fly yesterday about the fate of iiNet, Australia's third-largest internet service provider and parent of New Zealand's ihug, but analysts were preparing for bad news.

The company's shares were halted from trading on the Australia Stock Exchange last Thursday and remained suspended yesterday. The company has not provided an explanation. But analysts were wary.

"Most trading halts followed by lengthy suspensions, as a general rule across the market, are more likely bad than good," said Macquarie analyst Tim Smart.

Speculation about the Perth-based company, which has 578,000 customers, has been rampant. Rumours on the trading halt have ranged from the company being sold, to it making an acquisition, to Westpac reviewing its bank debt.

An iiNet spokesman would not comment yesterday.

Mark Rushworth, chief executive of ihug, also declined to comment.