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TeamTalk shareholders back Vodafone deal

NZ Newswire logoNZ Newswire 12/04/2017 Paul McBeth

TeamTalk shareholders have overwhelmingly backed a deal to sell a controlling stake in its rural broadband unit Farmside to Vodafone, effectively rejecting a takeover by Spark New Zealand.

Wellington-based TeamTalk asked shareholders to approve a deal where Vodafone would pay $10 million for a 70 per cent stake in Farmside, with an option to buy the remaining 30 per cent holding for $3m.

At a special meeting in Wellington on Wednesday, 99.6 per cent of votes cast by 303 shareholders were in favour of the deal, while seven investors holding 0.4 per cent were opposed.

More than 40 people attended the meeting, where TeamTalk chairman Roger Sowry and chief executive Andrew Miller put forward the case in favour of the deal, which would reduce the company's debt to a more manageable level faster and enable an earlier return to dividend payments, and fielded a dozen or so questions from the floor.

Approving the transaction meant Spark's 80 cents per share takeover bid, valuing TeamTalk at $22.7m, was defeated, with the country's biggest telecommunications company having warned the offer would lapse if the resolution was passed.

Spark has since confirmed the offer has lapsed in a statement to the NZX.

Mr Sowry acknowledged that the board made the wrong call to buy Farmside in 2012 for $31m in cash and scrip and had "taken the hit on the balance sheet for the last two years".

However, he was more optimistic about the future partnership with Vodafone, saying "we can actually turn this company around".

Vodafone chief executive Russell Stanners told TeamTalk shareholders the acquisition would let his company move further into the rural market, which Vodafone has been increasing its exposure to over the past five or six years.

TeamTalk shares were unchanged at 80 cents, while Spark shares rose 1.1 per cent to $3.54.

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