Telecom New Zealand announced this morning that it intends to make a takeover offer for the 20 per cent of shares in AAPT that it does not already own.
Telecom NZ chief executive Theresa Gattung said in a statement that the company's wholly owned Australian subsidiary TNZ Australia will offer minority shareholders $7.25 in cash for each AAPT share.
Telecom NZ said the offer price represents a 23.5 per cent premium to the volume weighted average trading price of the shares over the three months ending August 14, 2000.
The offer will be subject to a number of conditions. Gattung said that acquiring the balance of AAPT shares would enable Telecom NZ "to take real advantage of synergies that are increasingly evident, especially in the high-growth areas of data and mobile communications, and internet services.
"Following our recent success securing the provision of integrated telecommunications services to the Commonwealth Bank, it has become clear to Telecom that our ability to further grow and develop the business in Australia will be enhanced by having full ownership of AAPT.
"We will also have greater flexibility to develop our businesses on a regional basis and to make the best strategic plays open to us going forward."
Industry rumours have recently linked Telecom NZ to a regional alliance involving Japan's mobile communications powerhouse NTT DoCoMo and Australia's C&W Optus, and also the US telco MCI WorldCom.
The cost to Telecom NZ of acquiring all minority shares in AAPT will be around $444 million (excluding executive share options), and it will be funded by additional borrowing which can be accommodated on the Telecom NZ group balance sheet.
Gattung said that formal offers would be sent to the minority shareholders shortly, together with a bidder's statement.
TNZ Australia acquired an initial 9.9 per cent shareholding in AAPT in May 1999 and increased its shareholding to 82 per cent during the second half of 1999 from which level it has subsequently been diluted to 80 per cent through the exercise of executive share options.
Macquarie Bank Limited is advising Telecom on the proposed offer and Salomon Smith Barney is advising AAPT.