Suitors? Yes we have a few, says Powertel

Stuart Corner
Thursday, 25 January 2007 10:20

IT Industry - Deals

Powertel (ASX: PWT) has responded to recent press reports that it is a takeover target by saying that it has had approaches and discussions but they are all at very early stages.

The company told the ASX that, in recent weeks, it has "received incomplete, non-binding and highly conditional confidential proposals from independent parties" and that it has "appointed external advisors to assist in the review of the proposals."

The company said it would "update its shareholders and the market in due course as required," but "at this stage, due to the confidential and highly conditional nature of discussions, investors should not assume that any transaction involving the company will necessarily be agreed or implemented."

Possible buyers have been named as Optus and Telecom NZ/AAPT - with Optus being concerned about the emergence of a major third force in the fixed line market. Commander Communications has also been named as a possible buyer and, even Vodafone which last year embarked on a global strategy to diversify into the fixed line business. In October Vodafone New Zealand bought ISP iHug for $NZ41 million.  Powertel, however would be a much bigger deal and getting bigger by the day. Its share price has doubled since September 2006 and its market capitalisation is close to $A300 million.

Powertel and AAPT already have close ties. In November 2006 Powertel struck a deal  to provide access services, primarily ADSL2+, to AAPT to enable it to reach residential and business customers, and the two companies flagged a possible integration. Telecom NZ CFO, Marko Bogoievski, said the deal had "opened the door on continuing discussions about further expansion and rationalisation between the two companies."