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Spark weighs options after Sky rejection

NZN 16/02/2017 Sophie Boot and Paul McBeth

Spark is considering its next move after Sky Television said it won't delay a planned merger with Vodafone for a few days to allow for appeals if the deal gets regulatory approval next week.

The Commerce Commission is scheduled to make a decision on the deal on February 23, with the companies set to create the country's largest telecommunications and media group, with Sky TV buying Vodafone NZ for $3.44 billion, funded by a payment of $1.25 billion in cash and the issue of new Sky TV shares at a price of $5.40 per share.

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

Spark, Trustpower and Internet New Zealand on Thursday asked the firms to hold off completing the merger for a few days if the regulator signed off to give them time to weigh up the decision and lodge an appeal, something Sky TV rejected.

Simon Moutter, Spark chief executive, told an analyst briefing he is considering options after that rejection.

Spark objects to the merger on the grounds that it would restrict access to popular sports coverage, and that an effective wholesale regime is necessary to prevent the monopoly position shifting into another market, he said.

Commerce 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.

Sky said it didn't see "any proper basis for seeking an interim stay from the courts" and would oppose any application.

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