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Sky TV refuses to delay merger

NZ Newswire logoNZ Newswire 15/02/2017 Sophie Boot

Sky Network Television says it won't delay a merger with Vodafone New Zealand to give other telecommunications companies time to go to court if the deal is approved by the Commerce Commission.

The merger would create the country's largest telecommunications and media group, but Sky says lawyers for Spark, Trustpower and InternetNZ have asked the two companies to delay its completion.

Spark's lawyer said they would seek an interim stay otherwise, Sky said on Thursday.

However, Sky did not believe there was any proper basis for seeking an interim stay from the courts.

"Sky intends to oppose any such application and seek an undertaking as to damages," it said in a statement to the NZX.

The proposed merger is still before the Commerce Commission and Sky said it had full confidence in the commission and its processes.

It would proceed with the merger if approved.

Commission approval has been delayed several times. In October the regulator raised concerns about what impact the deal would have on competition in the market, saying while consumers may benefit from cheap services at first, other broadband and mobile providers could lose the ability to build scale in their businesses and become weaker rivals.

Spark New Zealand and Two Degrees Mobile have formally opposed the merger, saying the deal would adversely impact consumers as a result of creating a company willing and able to use premium live sports content to stifle competition.

The merger would see Sky TV buy Vodafone NZ for $3.44 billion, funded by a payment of $1.25b in cash and the issue of new Sky TV shares at a price of $5.40 per share.

Vodafone would becomes a 51 per cent majority shareholder in Sky TV, in what amounts to a reverse takeover. The pay-TV operator will borrow $1.8b from Vodafone to fund the purchase, repay existing debt and use for working capital.

Sky TV shares last traded at $4.59, and have dropped 4.3 per cent over the past 12 months.

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