Telecom NZ rejects shareholder calls for separation

12 Aug 2008

Telecom New Zealand has played down calls from a US hedge fund for the company to proceed with a split of its retail and networks operations. ‘Telecom has carefully considered the implications of structural separation, and does not believe that separating our retail and network businesses would be in the best interest of shareholders at this time,’ the telco’s Chairman Wayne Boyd said in a statement. Telecom was responding to comments from US fund manager Elliot International, which holds around 3% of Telecom’s shares. The fund is nominating two directors to the telco’s board and says it wants to see changes made to the firm’s long-term strategy. ‘In our view, Telecom’s performance languishes behind that of other key telecommunications players in the international market, and we believe this is partly due to an unclear and outdated strategy,’ said James Smith, a portfolio manager at Elliot International. ‘Telecom needs to take immediate and serious action to improve its situation and to consider and debate new ideas that will benefit customers and shareholders,’ he added.

New Zealand, Spark New Zealand Group