Telecom New Zealand has made a $1.5 billion bid for Australia's third-largest telecommunications provider, AAPT, the company said today.
The New Zealand carrier already owns 19.8 per cent of the Australian carrier and is bidding for all the outstanding AAPT shares at a unit price of $5.10.
Telecom NZ's international strategy includes growing its trans-Tasman business -- that between New Zealand and Australia -- said Telecom NZ's chief executive officer Roderick Deane in a statement issued today. AAPT enables Telecom NZ to directly participate in the fast-growing Australian telecommunications market, and increasing its shareholding in the Australian carrier should enable both companies to achieve key strategic goals sooner than if they were to proceed independently, Deane said.
The New Zealand carrier expects synergies between the companies in a number of areas including broader services for corporate customers and greater potential for the two companies' Internet and mobile phone services.
Telecom NZ first acquired a stake in AAPT in May of this year, helping to drive off a hostile bid for AAPT by Cable & Wireless Optus, Australia's second-largest carrier. Since then, the two companies have had numerous discussions trying to find a way for Telecom NZ to increase its shareholding percentage, Deane said in the statement.
Last month, AAPT reported revenues up 50 per cent over its previous fiscal year, to $750.8 million for its year ended Aug 30, 1999, despite difficulties the carrier said were caused by the hostile Optus bid.
Telecom NZ was one of the region's earliest carriers to be privatised, with substantial stakes being taken in September 1990 by Bell Atlantic and Ameritech Corp.
The merged company, if formed, would principally face competition in New Zealand from second carrier Clear Communications along with C&W Optus and national carrier Telstra in Australia.