Spark buyout rumours

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freitasm

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#319679 21-May-2025 11:01

According to NZ Herald (paywalled) in reference to an Australian report.

At least two private equity firms are “going over” Spark as they “ponder a buyout proposal,” according to a report in The Australian‘s Dataroom market gossip column.

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freitasm

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#3375227 21-May-2025 11:09

More details: https://tags.news.com.au/prod/newskey/generator.html?origin=https%3a%2f%2fwww.theaustralian.com.au%2fbusiness%2fdataroom%2fspark-of-interest-as-private-equity-looks-at-buyout%2fnews-story%2fa4ea0c08f90c63a0ab666c26e0618208&17477824871138948710

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#3375229 21-May-2025 11:21

It doesn't appear to have any major impact on their share price thou ... so the market isn't reading that much in to it (yet?)

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#3375231 21-May-2025 11:45

Private equity ownership usually works out quite well for both customers and employees...

Oh wait...

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#3375264 21-May-2025 13:52

I wonder if this is because they see the current share price as cheap after it crashed in price

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#3375269 21-May-2025 14:14

Putting emphasis on this being my personal opinion and based only on public knowledge (I don't know anything the public doesn't that would be relevant), so far there's only one outlet that's reported that rumour, and everyone else has just repeated it. I doubt Spark will state anything on the matter unless an offer is made which needs to be put before the shareholders. If ever there was a time though, the price hasn't been this low since 2011 and it seems pretty unlikely that it won't climb back up. I think the outsourcing ventures they're undertaking (Infosys, Nokia) seem to be an attempt to recreate the share price climb that happened after the 2010 outsourcing to Alcatel Lucent.

The biggest fly in the ointment I see is Spark's Kiwi Share obligations, although I'm not entirely sure how significant an impact that would have in Spark's case versus a contemporary similar situation, like the Vodafone NZ buyout.

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#3375483 21-May-2025 23:04

cddt:

Private equity ownership usually works out quite well for both customers and employees...

To be fair... Re-orgs and Spark aren't exactly a foreign concept (although not unique to Spark - quite a few Telcos have them).

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#3375489 22-May-2025 01:03

toejam316:

Putting emphasis on this being my personal opinion and based only on public knowledge (I don't know anything the public doesn't that would be relevant), so far there's only one outlet that's reported that rumour, and everyone else has just repeated it. I doubt Spark will state anything on the matter unless an offer is made which needs to be put before the shareholders. If ever there was a time though, the price hasn't been this low since 2011 and it seems pretty unlikely that it won't climb back up. I think the outsourcing ventures they're undertaking (Infosys, Nokia) seem to be an attempt to recreate the share price climb that happened after the 2010 outsourcing to Alcatel Lucent.

The biggest fly in the ointment I see is Spark's Kiwi Share obligations, although I'm not entirely sure how significant an impact that would have in Spark's case versus a contemporary similar situation, like the Vodafone NZ buyout.

If there is going to be a buy out I'd sooner it be bought out by someone like Telstra, an organisation that is already in the industry with the goal of creating a trans-tasman telecommunications giant rather than a group of private equity whose only interest is to load it up with debt, asset strip it then leave it to the tax payers to rescue it aka Fay Richwhite and what took place with the railways. If there were ever a bigger pack of scumbags than private equity I guess I'm lucky in that I haven't met them yet.

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#3375491 22-May-2025 05:06

cokemaster:

cddt:

Private equity ownership usually works out quite well for both customers and employees...

To be fair... Re-orgs and Spark aren't exactly a foreign concept (although not unique to Spark - quite a few Telcos have them).

Yeah but an LBO is generally a different animal from a normal re-org.

The main goal of a buyout is to sell off anything that isn't core business while inflating the books to the point where it can be refloated or moved on to new ownership. Investing for the future generally isn't part of the strategy which can create a whole range of issues down the line.

It's often good for shareholders but not great for anyone else.

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#3375502 22-May-2025 08:13

Handle9:

Yeah but an LBO is generally a different animal from a normal re-org.

The main goal of a buyout is to sell off anything that isn't core business while inflating the books to the point where it can be refloated or moved on to new ownership. Investing for the future generally isn't part of the strategy which can create a whole range of issues down the line.

It's often good for shareholders but not great for anyone else.

This is an excellent analysis. I've yet to see PE make a company better for the customer.

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#3375508 22-May-2025 09:00

matisyahu:

If there is going to be a buy out I'd sooner it be bought out by someone like Telstra, an organisation that is already in the industry with the goal of creating a trans-tasman telecommunications giant rather than a group of private equity whose only interest is to load it up with debt, asset strip it then leave it to the tax payers to rescue it aka Fay Richwhite and what took place with the railways. If there were ever a bigger pack of scumbags than private equity I guess I'm lucky in that I haven't met them yet.

private equity firms pretty much only ever buy-to-sell, and make as much money off it in as short amount of time possible. good for neither employees nor customers.

i do seem to remember Telstra looking at buying Spark a couple of years or so ago, and kind of putting that in the too-hard basket.

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#3375589 22-May-2025 12:14

matisyahu:

toejam316:

Putting emphasis on this being my personal opinion and based only on public knowledge (I don't know anything the public doesn't that would be relevant), so far there's only one outlet that's reported that rumour, and everyone else has just repeated it. I doubt Spark will state anything on the matter unless an offer is made which needs to be put before the shareholders. If ever there was a time though, the price hasn't been this low since 2011 and it seems pretty unlikely that it won't climb back up. I think the outsourcing ventures they're undertaking (Infosys, Nokia) seem to be an attempt to recreate the share price climb that happened after the 2010 outsourcing to Alcatel Lucent.

The biggest fly in the ointment I see is Spark's Kiwi Share obligations, although I'm not entirely sure how significant an impact that would have in Spark's case versus a contemporary similar situation, like the Vodafone NZ buyout.

If there is going to be a buy out I'd sooner it be bought out by someone like Telstra, an organisation that is already in the industry with the goal of creating a trans-tasman telecommunications giant rather than a group of private equity whose only interest is to load it up with debt, asset strip it then leave it to the tax payers to rescue it aka Fay Richwhite and what took place with the railways. If there were ever a bigger pack of scumbags than private equity I guess I'm lucky in that I haven't met them yet.

The statement that it's private equity firms that are interested rules it out, but my gut reaction when I saw the headline was "Is TPG Telecom looking over here now?", would be a funny full circle with how their structure includes the old AAPT, which Telecom used to own back in the day.

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#3375594 22-May-2025 13:04

Getting a bit off-topic here but I remember ads for TPG in the old PC World magazine, from way back in the days when they sold hardware ("Total Peripherals Group") instead of telecom services!

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#3375606 22-May-2025 13:52

toejam316:

The biggest fly in the ointment I see is Spark's Kiwi Share obligations, although I'm not entirely sure how significant an impact that would have in Spark's case versus a contemporary similar situation, like the Vodafone NZ buyout.

The Kiwishare doesn't exist since they split the monopoly network ops off into Chorus,