IiNet halted amid talk it will buy part of AAPT

IiNet shares halted amid reports it will buy consumer unit of Telecom’s AAPT

July 29 (BusinessDesk) – Shares of iiNet Ltd. were halted pending an announcement amid reports it is poised to buy the consumer business of Telecom Corp.’s underperforming AAPT unit.

In a brief statement to the ASX, iiNet requested a two-day trading halt “pending the announcement of a potential acquisition.” It expects to announce the proposed transaction before the start of trading on Monday.

IiNet emerged as the preferred bidder for AAPT retail after a rival bid from TPG Telecom for all of AAPT faltered, the Australian newspaper reported. Telecom had been hoping to sell AAPT for at least A$300 million but will now retain its wholesale fibre division for possible sale into Australia’s national broadband network at a later date, it said.

“Telecom has previously advised that it would consider offers in relation to the AAPT business that are in the best interests of shareholders,” the Auckland-based phone company said in a statement to the ASX and the NZX today. “Telecom is currently considering strategic options in respect of these assets.”

Telecom’s stock rose 1.5% to $1.99 on the NZX today, the highest since May 20.

Exiting AAPT would signal the end of an investment foray into Australia that has been little short of disastrous for the New Zealand company. It wrote down the value of the asset by some NZ$1.7 billion and has previously failed to find any buyer interest in the business it progressively acquired starting in 2000.

Telecom also announced the sale of a small stake in ASX-listed listed business phone services company Macquarie Telecom for A$9.9 million.

Macquarie traded unchanged at A$5.19 on the ASX today, suggesting Telecom sold about 1.9 million shares. The stock has gained 13% in the past month.

Sydney-based Macquarie announced on July 4 that its earnings before interest, tax, depreciation and amortization from continuing operations climbed about 22% to as much as A$29 million in the 12 months ended June 30.

Macquarie cited the performance of its high-margin Hosting unit for the improvement and said its balance sheet was strong, with A$56 million of cash and cash equivalents.

(BusinessDesk)

© Scoop Media