Looming IPOs could end NZX tech drought

Fund managers were told [2degrees] would be valued around A$1.5b.

After a long technology-company listing drought, the NZX now has two possible IPOs looming as Vocus NZ and 2degrees manoeuvre toward possible listings.

Vocus NZ parent Vocus Group — whose shares have been suspended since June 25 — formally delisted from the ASX yesterday as the final step in its $A3.5 billion ($3.7b) sale after current shareholders were paid out.

The final stages of the deal also saw the Australasian telco’s entire board tender its resignation this week, as expected, including Auckland-based executive director Mark Callander.

The departures from the boardroom won’t affect management roles. Callander, for example, continues to serve as chief executive of the company’s New Zealand operation, and the head of its wholesale business on both sides of the Tasman.

And after resigning as managing director, Kevin Russell continues his group chief executive role.

The sale was also subject to a shareholder vote following an independent report by Deloitte, court approval, and NZ OIO approval.

New owners Macquarie Infrastructure and Real Assets (Mira, part of ASX-listed Macquarie Group) and superannuation fund Aware Super formed a consortium called Voyage Australia for the acquisition.

So far, Voyager has made four appointments to what will become the new Vocus Group board: three from Macquarie (Ani Satchcroft, Mark Hector and Patrick McCawe) and one from Aware Super (Maria Donnelly). It says others will follow.

On July 1, a Macquarie insider confirmed to the Herald that Forsyth Barr, Goldman Sachs and UBS had been hired to manage the potential float or trade-sale of Vocus’ New Zealand arm.

Vocus NZ’s stable includes Orcon, Slingshot and Sky Broadband.

Voyage Australia has been approached for comment. Vocus NZ had no comment on the potential listing.

Meanwhile, documents leaked from a recent non-deal roadshow for 2degrees’ possible IPO indicate fund managers were told the Kiwi telco would be valued around A$1.5b.

The roadshow — which took the virtual form of 32 Zoom calls — was part of an effort by Jarden, Macquarie and Craigs Investment Partners to sell fund managers on the merits of 2degrees, which owns its own mobile network but is relatively weak in broadband (a contrast to Vocus, which is strong in broadband and owns its own nationwide fibre network, but is a minnow in mobile through a wholesale deal with Spark).

2degrees is majority-owned by Seattlebased, Toronto-listed Trilogy International Partners, which earlier flagged it was lining up a possible public listing of its NZ asset, and a possible trade sale of its second asset, under-performing Bolivian telco NeuvaTel (trading as Viva).

While 2degrees recently reported its fifth year of operating profit, the Central American Viva has struggled amid a chaotic, pandemic-hit economy and Trilogy carries a US$630m ($903.2m) debt load. Trilogy has a market cap of just C$112m ($128m).

While the NZX could potentially land both Vocus NZ and 2degrees, dual or ASXonly listings are also possible (at this point, both parties are keeping their options open in the build-up to their respective possible IPOs).

And the local bourse will also be wary that a trade sale could also take either off the table, just as Vodafone NZ’s IPO was headed off at the last minute in 2019 as the business was bought by Infratil and Brookfield.