Spark boss cools on Vocus acquisition
Spark managing director Simon Moutter appears to have all but ruled out the company buying the country’s third-biggest internet provider, Vocus New Zealand.
Australia-based Vocus owns the Slingshot and Orcon brands.
It put its New Zealand arm on the block last year and expects to have ‘‘a fully binding sale agreement’’ by July.
Analyst Morningstar forecast on Wednesday that Vocus NZ could fetch A$400 million (NZ$430 million).
However, specialist Australian industry analyst Paul Budde has estimated A$200m would be a fairer price.
Acquiring Vocus NZ would be a means for either Spark or Vodafone to shore up their falling shares of the broadband market.
Commerce Commission figures suggest consumers have been using the switch to ultra-fast broadband as an opportunity to shop around among a wider pool of suppliers.
But Moutter said making money from broadband was ‘‘extremely challenging’’ and indicated that acquiring the whole of Vocus NZ would be unattractive for Spark.
‘‘We have been reasonably consistent that we have never really been looking at merger and acquisition opportunities in our game in much more than than the $100m territory and that remains our focus,’’ he said.
‘‘We don’t think taking really huge bets in particular slots of an industry category which is still really highly commoditising and stressed is the right answer. We are trying to be a bit more clever than that.’’
Instead, Moutter said Spark’s focus was on acquiring businesses that provided ‘‘new capabilities’’, which had in the past led it to acquire cloud computing and data analytics firms.
Vocus NZ provides broadband to 196,000 consumers and electricity to about 12,000 homes. It also provides telecommunications services to businesses and operates a fibreoptic backhaul network.
Vodafone, 2degrees, Trustpower, Spark and several private equity firms are believed to be among 16 suitors that initially expressed interest in bidding for Vocus NZ.
There is speculation Telstra could also bid for the company as a way to re-enter the New Zealand market and get more experience in providing fibre-optic broadband to homes.
A ‘‘non-compete clause’’ agreed when Telstra sold TelstraClear to Vodafone in 2012 is believed to have expired at the end of October.