Spark signals telco takeover

Spark has had a huddle and decided it wants to buy Teamtalk.

The telecommunications company said on Tuesday it would make a full takeover for its fellow Nzx-listed telecommunications company at 80 cents a share.

Teamtalk shares closed at 45c a share last Friday, which Spark managing director Simon Moutter said made for a compelling offer.

Spark wanted to buy all three of Teamtalk’s operations, which included its mobile radio services, its metro fibre services company Citylink, and its rural internet service provider, Farmside.

Moutter said Teamtalk was a small operator which had declined over the last few years.

The company’s shares had ‘‘significantly underperformed’’, he said, and it had limited ability to fund the investment it needed.

‘‘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. We believe Spark is also able to provide certainty for Teamtalk’s people and customers.’’

Spark has been looking to buy complementary businesses and believed Teamtalk was a good match to its strategy.

Teamtalk shares had fallen 25 per cent in the last year, but were up 26c following Tuesday’s announcement.

The company said its board would meet to consider the offer shortly, but would not comment in the meantime.

‘‘The board of Teamtalk strongly recommends that Teamtalk shareholders do not take any action in respect of the notice of intention to make a takeover offer until they receive the board’s further guidance.’’

Last April, its chief executive David Weir resigned after admitting he had been a bit of ‘‘an arse’’.

After a long period posting solid profits and dividends, Teamtalk hit a rough patch following its $31 million acquisition of rural broadband provider Farmside in 2012.

When he resigned, Weir said he had ‘‘hit a wall’’ and some of the company’s 200 staff had complained about him.

Ware said he couldn’t detail the complaints against him as ‘‘the lawyers and Privacy Commissioner would kill me’’.

‘‘I can say it involves a series of big brain explosions on my part which impacted on people who deserved better.

‘‘This company has been my baby for 20 years and I care about it more than anyone does.

‘‘But lately I’ve been behaving like an arse, and that’s not good enough.’’

Ware’s message to shareholders was straightforward: ‘‘Thanks and good luck.’’