Telecom NZ to buy PowerTel for $A357m

Stuart Corner
Wednesday, 31 January 2007 03:19

IT Industry - Deals

Telecom New Zealand plans to acquire 100 percent of Australian telco PowerTel Limited (ASX: PWT).

Telecom will pay $A2.30 per share in cash by way of a scheme of arrangement. The price represents a 31.2 percent premium on the volume weighted average price over the last three months and a 18.7 percent premium to PowerTel's volume weighted average share price over the last 30 days.
The transaction values PowerTel at approximately A$357 million including net debt and has been unanimously endorsed by the PowerTel directors.

The acquisition will also give Telecom a 20 percent stake in Australian ISP iiNet (ASX: IIN) and a substantial stake in Macquarie Telecom (ASX: MAQ)

Telecom has also entered into an option agreement to acquire 10 percent of PowerTel's shares on issue from TVG (PowerTel's major shareholder), also at $A2.30 per share.

The move comes less than 24 hours after PowerTel postponed its AGM, which had already started, saying it had received "incomplete, non-binding and conditional confidential proposals from independent parties" and that there was "no certainty that a transaction involving PowerTel will be executed or implemented."

Telecom NZ foreshadowed the deal last November  when it announced a wholesale agreement between PowerTel and its Australian subsidiary, AAPT. However the value of PowerTel has increased substantially since then.