Spark Sticks to $22.7m for TeamTalk, But Lowers Acceptance Threshold

Spark New Zealand has said its 80 cent per share offer for TeamTalk valuing the company at $22.7m, announced in February, is “full and final” but it has waived the condition requiring 90 percent shareholder acceptance. The offer will how become unconditional if shareholder acceptance exceeds 50 percent.

Spark has also confirmed that if TeamTalk shareholders approve the sale of the Farmside subsidiary to Vodafone its offer will lapse. TeamTalk shareholders will meet to vote on the Vodafone offer on 12 April. TeamTalk’s directors have advised them to accept it.

Spark’s CFO David Chalmers, said the independent advisor's report on its offer, prepared for TeamTalk by Grant Samuel, did not adequately account for the market risks to the CityLink and TeamTalk Mobile Radio businesses over coming years.

“As New Zealand’s largest digital services company, Spark has a strong insight into industry dynamics, and what the future shape of communication networks may be,” he said. “We will not pay a significant premium for an unsubstantiated forecast that is light on detail and in our view is unlikely to be achieved.”

He said TeamTalk shareholders should “carefully consider whether they prefer a clear exit path with Spark’s offer, or to continue as an investor in TeamTalk and rely upon the board and management to deliver the turnaround they’ve talked about.”

Spark said that, if its TeamTalk takeover failed, it would then “seek alternative options to [TeamTalk subsidiary] CityLink to achieve our Wellington metro fibre objectives.”