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# 208327 7-Feb-2017 09:27
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Just received:

 

 

Spark New Zealand Trading Limited today advised it has filed a notice of its intention to make a full takeover offer for 100% of the fully paid ordinary shares in TeamTalk Limited at an offer price of 80 cents per share.

 

TeamTalk is comprised of three operating businesses; TeamTalk (mobile radio services), CityLink (provision of metro fibre services primarily in the Wellington CBD), and Farmside (internet service provider focused on the rural market).

 

This notice is consistent with Spark’s strategy to achieve greater control of the end-to-end customer experience for our business customers, as outlined in the FY16 Full Year Results announcement to the market. Spark has also indicated it will make selective acquisitions of complementary businesses that support Spark’s revenue and earnings growth, and TeamTalk fits this criteria.

 

Spark believes this offer is attractive for TeamTalk shareholders, being a significant premium to TeamTalk’s latest share price and previous trading. Specifically, it represents a:

 

  • 78% premium to the closing price of TeamTalk shares on the 3rd of February 2017;
  • 71% premium to the one-month volume weighted average price of TeamTalk shares;
  • 82% premium to the three-month volume weighted average price of TeamTalk shares.

Spark Managing Director Simon Moutter said, “We believe this is a compelling offer, at a significant premium to the current TeamTalk share price, which is unlikely to be achieved by other means. This offer is advantageous to TeamTalk shareholders in being an offer for the full TeamTalk business.

 

“TeamTalk is a small operator in the New Zealand telco market. Its financial performance has declined over the last few years, with a number of profit downgrades, and it faces significant re-investment requirements across its businesses. Given TeamTalk’s debt position (last reported bank debt was $33.6m with a maturity date of September 2017), and small market capitalisation (approximately $12.8m), its ability to fund this investment is constrained. This has been reflected in TeamTalk’s decision not to pay a final dividend to shareholders in FY16.

 

“Spark, as a digital services company with its own extensive networks, distribution channels and customer base, has the ability to provide a more positive pathway forward for TeamTalk customers and staff.

 

“The reality is TeamTalk shares have significantly underperformed relative to the New Zealand market over the last three years, with much lower total returns for investors than the NZX50 gross return index on a Total Shareholder Return (TSR) basis.

 

“This offer allows TeamTalk shareholders who have held shares over a long period the opportunity to make up some of this underperformance, with a certain cash payment if the offer becomes unconditional. We believe Spark is also able to provide certainty for TeamTalk’s people and customers.”

 

To assist Spark in determining whether to proceed with the proposed offer, Spark requests that TeamTalk permit Spark to complete due diligence.

 





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  # 1716359 7-Feb-2017 09:29
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I called this about six months ago. Spark are well on their way to being a big vertically integrated Telco with their own fibre networks in Auckland and Wellington. They simply do not want to pay Chorus for wholesale any longer.

 

 


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  # 1716370 7-Feb-2017 09:52
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sbiddle:

Spark are well on their way to being a big vertically integrated Telco with their own fibre networks in Auckland and Wellington. They simply do not want to pay Chorus for wholesale any longer.

 

 

 

Are you saying they are wanting to eventually build their own GPON access network or just metro Ethernet for backhaul (unbundling?)

 
 
 
 


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  # 1716371 7-Feb-2017 10:01
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Haha wow... I totally didn't realise Citylink was part of TeamTalk!


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  # 1716373 7-Feb-2017 10:01
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yitz:
sbiddle:

 

Spark are well on their way to being a big vertically integrated Telco with their own fibre networks in Auckland and Wellington. They simply do not want to pay Chorus for wholesale any longer.

 

 

 

Are you saying they are wanting to eventually build their own GPON access network or just metro Ethernet for backhaul (unbundling?)

 

How far off is fiber unbundling from happening? Perhaps they are getting their own backhauls inplace for when that happens?

 

Also entries to large buildings to start rolling out their own network to those.





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  # 1716378 7-Feb-2017 10:03
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Farmside - so what will they do with all those Vodafone powered RBI connections?? :)

 

 





Chorus has spent $1.4 billion on making their xDSL broadband network faster and even more now as they are upgrading their rural Conklins. If your still stuck on ADSL or VDSL, why not spend $195 on a master filter install to make sure you are getting the most out of your connection?
I install - Naked DSL, DSL Master Splitters, VoIP, data cabling and general computer support for home and small business.
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Need help in Auckland, Waikato or BoP? Click my email button, or email me direct: [my user name] at geekzonemail dot com


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  # 1716384 7-Feb-2017 10:16
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What happens to all the internet exchanges that CityLink run, which Spark has historically refused to connect to?  I guess AKLIX is slowly replacing the APE, but what about the others south of the Bombay hills (WIX, etc)?


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  # 1716404 7-Feb-2017 10:50
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yitz:
sbiddle:

 

Spark are well on their way to being a big vertically integrated Telco with their own fibre networks in Auckland and Wellington. They simply do not want to pay Chorus for wholesale any longer.

 

 

 

Are you saying they are wanting to eventually build their own GPON access network or just metro Ethernet for backhaul (unbundling?)

 

I think you would have to assume Spark would be very keen on unbundled GPON when it happens in 2020.

 

The number of buildings covered by Citylink in Auckland and Wellington is pretty extensive. That's a lot of money that they can put in their own pockets rather than paying Chorus for UFB and/or HSNS connectivity.

 

I guess the big question is whether they will remain an open access network.

 

 


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  # 1716405 7-Feb-2017 10:50
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freitasm:

 

Just received:

 

 

Spark New Zealand Trading Limited today advised it has filed a notice of its intention to make a full takeover offer for 100% of the fully paid ordinary shares in TeamTalk Limited at an offer price of 80 cents per share.

 

TeamTalk is comprised of three operating businesses; TeamTalk (mobile radio services), CityLink (provision of metro fibre services primarily in the Wellington CBD), and Farmside (internet service provider focused on the rural market).

 

 

 

 



This will also be to move traditional Radio Users off the Radio Platforms (Fleetlink) and the likes onto the LTE network... Looks like another nail trying to be driven into the coffin of Traditional Radio. Time will tell


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  # 1716409 7-Feb-2017 10:59
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deadlyllama:

 

What happens to all the internet exchanges that CityLink run, which Spark has historically refused to connect to?  I guess AKLIX is slowly replacing the APE, but what about the others south of the Bombay hills (WIX, etc)?

 

 

 

 

I imagine they will just shut them down, citing no prior experience to be able to maintain them :P


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  # 1716749 7-Feb-2017 19:39
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Funny, I remember working at Telecom Mobile Radio back in 1998, which was later sold off to...Teamtalk, from memory? And now they're buying it back?


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  # 1716751 7-Feb-2017 19:43
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quickymart:

 

Funny, I remember working at Telecom Mobile Radio back in 1998, which was later sold off to...Teamtalk, from memory? And now they're buying it back?

 

 

Yep... Mohan sold it to them lock stock and 2 smoking along with all the backhaul as part of the deal in 99. Closed deal in 2000....





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  # 1716787 7-Feb-2017 20:54
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Gotta love that Spark now want nothing to do with their old partner in crime!

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  # 1717109 8-Feb-2017 10:55
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coffeebaron:

 

Farmside - so what will they do with all those Vodafone powered RBI connections?? :)

 

 

 

 

Do the same thing they're doing to sub-par copper connections and move them to their own network ;)


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  # 1717111 8-Feb-2017 10:58
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Darren0:

coffeebaron:


Farmside - so what will they do with all those Vodafone powered RBI connections?? :)


 



Do the same thing they're doing to sub-par copper connections and move them to their own network ;)


They would need to start doing full installs.




Chorus has spent $1.4 billion on making their xDSL broadband network faster and even more now as they are upgrading their rural Conklins. If your still stuck on ADSL or VDSL, why not spend $195 on a master filter install to make sure you are getting the most out of your connection?
I install - Naked DSL, DSL Master Splitters, VoIP, data cabling and general computer support for home and small business.
Rural Broadband RBI installer for Ultimate Broadband and Full Flavour

 

Need help in Auckland, Waikato or BoP? Click my email button, or email me direct: [my user name] at geekzonemail dot com


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  # 1717138 8-Feb-2017 11:47
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It's expensive to be in building with a private network.  I pay $100/month for 75GB at 50Mbps ....





Mike

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