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Sky Network Television says it will not delay a merger with Vodafone New Zealand to give other telecommunications companies time to appeal it in court if the transaction is approved by the Commerce Commission.
The merger would create the country’s largest telecommunications and media group, with Sky TV buying Vodafone NZ for $3.44 billion, funded by a payment of $1.25 billion in cash and the issue of new Sky TV shares at a price of $5.40 per share. Vodafone becomes a 51% majority shareholder in Sky TV, in what amounts to a reverse takeover. The pay-TV operator will borrow $1.8 billion from Vodafone to fund the purchase, repay debt and as working capital.
Lawyers for Spark, Trustpower and InternetNZ had asked the two companies to delay completing the merger, which is still waiting on approval from the regulator, Spark’s lawyer saying they would seek an interim stay if the two companies refused to delay, Sky TV said.
"Sky does not consider that there is any proper basis for seeking an interim stay from the courts and, should any party seek an interim stay, Sky intends to oppose any such application and seek an undertaking as to damages," the company said in a statement to the NZX.
"Sky has full confidence in the New Zealand Commerce Commission [NZCC] and its processes. In the event the NZCC provides clearance in respect of the proposed merger, Sky intends to proceed to completion in an orderly manner upon satisfaction or waiver of any outstanding conditions."
Commerce Commission approval has been delayed several times. In October, the regulator raised concerns about the effect the deal would have on competition in the market, saying while consumers may benefit from cheap services at first, other broadband and mobile providers could lose the ability to build scale in their businesses and become weaker rivals.
Spark New Zealand and Two Degrees Mobile have formally opposed the merger, saying the deal would adversely effect consumers as a result of creating a company willing and able to use premium live sports content to stifle competition.
- Sophie Boot