The 80c-per-share offer is a 78% premium for shareholders, given the shares last traded at 45c.
TeamTalk shares soared after the announcement, rising more than 65%, or 29c, to 74c. They ended the day at 75c.
Telco provider TeamTalk has three businesses: its TeamTalk mobile radio services, CityLink fibre serves mainly in Wellington, and internet provider Farmside targeting the rural market.
Spark managing director Simon Moutter said TeamTalk fitted Spark's criteria as a selective acquisition to complement its businesses, to support Spark's revenue and earnings growth.
''TeamTalk is a small operator in the New Zealand telco market.
''Its financial performance has declined over the last few years, with a number of profit downgrades, and it faces significant reinvestment requirements across its businesses,'' Mr Moutter said in the takeover notice.
TeamTalk's response to the offer was to ask its shareholders to take no action at present while its board considered the offer, and it would give guidance later.
Mr Moutter said given TeamTalk's debt position, last reported at $33.6 million with a September maturity date, and its small market capitalisation of about $12.8 million, its ability to fund that investment was ''constrained''.
The circumstances were reflected in TeamTalk's decision not to pay a final dividend to shareholders, he said.
Mr Moutter said given the ''significant premium'', Spark's offer should be compelling for shareholders and was ''unlikely to be achieved by other means''.
Forsyth Barr broker Suzanne Kinnaird said when Spark first mentioned acquisition of fibre assets in CBD areas last year, the brokerage had mooted Vector's networks in Auckland and TeamTalk for its Wellington and Auckland assets.
''There are two aspects to the deal that would make sense for Spark,'' she said.
Firstly, Spark got immediate access to TeamTalk's fibre networks in the CBDs of Wellington and Auckland, and, secondly, access to about 15,000 rural broadband customers who were mainly on satellite or fixed/wireless options with rival Vodafone.
''From a TeamTalk perspective, it has struggled since its acquisition of Farmside [rural network],'' she said.
It had struggled in the transition from its satellite customers to fixed wireless mobile services, and in competing with Chorus in Wellington to provide fibre services, Mrs Kinnaird said.
''It's important to note a few hurdles remain before an offer is finalised,'' she said.
Spark had requested TeamTalk allow it to complete due diligence. The offer conditions included 90% shareholder acceptances be obtained, but with an option to waive that condition, regulatory approvals were required and consents from other parties TeamTalk dealt with.
The offer follows TeamTalk's review of its operations after the company struggled to integrate the rural ISP Farmside business, acquired in late 2012 for $42million, which left it with higher debt and flat earnings, BusinessDesk reported.
TeamTalk shares peaked in January 2013 at $3.20.
