TeamTalk rejects Spark takeover, agrees to sell 70% stake in Farmside to Vodafone NZ

24 Mar 2017

TeamTalk, the New Zealand telecoms firm which offers fibre-optic services in the main urban areas of Wellington and Auckland (via subsidiary CityLink) and also covers a number of underserved rural locations (via Farmside), has confirmed that its directors have unanimously recommended that the company’s shareholders reject Spark’s hostile NZD23 million (USD16.2 million) takeover bid. Andrew Miller, TeamTalk CEO, commented: ‘Spark’s predatory offer has been tactically made before the company and its shareholders could benefit from the turnaround strategy implemented late last year. It is an attempt to exploit the challenges the company faced during 2016. Those challenges have now largely been addressed and TeamTalk is profitable again, as the half-yearly results to 31 December 2016 have demonstrated.’

Hot on the heels of the rejection, it has been announced that Vodafone New Zealand and TeamTalk have reached an agreement that will see Vodafone acquire 70% of the shares in BayCity Communications for NZD10 million in cash. BayCity Communications and its wholly owned subsidiaries (trading as Farmside) own and operate TeamTalk’s rural broadband and satellite business. The transaction includes a put option that enables TeamTalk to sell its remaining 30% to Vodafone for NZD3 million at any time in the next three years. In turn, Vodafone NZ would hold a call option which enables it to acquire the remaining 30% of the shares in Farmside for NZD3 million in certain circumstances.

New Zealand, CityLink (New Zealand), Farmside, Spark, Spark New Zealand Group, TeamTalk Group, Vodafone New Zealand