A week ago, Spark confirmed its proposed takeover of TeamTalk in a deal valued at about NZ$22.7 million with an offer to shareholders of 0.80 cents per share.
The regulator will determine whether the proposed takeover will substantially lessen competition in the telecoms market.
But in its application to the Commission, Spark contends there will be no lessening of competition, particularly for the CityLink business which operates in Wellington and the Auckland CBD.
The telco has now applied to the commission to clear the way for the acquisition to go ahead and to either directly or indirectly acquire up to 100% of the shares of TeamTalk.
TeamTalk services include delivering access to fibre networks for larger organisations and businesses in the main centres on digital mobile radio and Internet and voice services to hard-to-reach areas.
In a formal statement announcing the application from Spark, the Commission says it must determine whether the competition that would be lost with the merger would be substantial and substantially lessen competition in a market.
Confirming its takeover offer last week, Spark said, if accepted by shareholders, it would give it ownership of fibre in Wellington and wireless rural Internet service provider Farmside.
Spark’s chief financial officer David Chalmers said he strongly believed the offer was in the best interests of TeamTalk shareholders, “many of whom have seen the value of their investment in TeamTalk relentlessly decline over recent years”.
“This offer allows TeamTalk shareholders to achieve a price for their shares that is 78% higher than the last closing price before Spark issued its Notice of Intention, and an 82% premium on a three-month volume weighted average price basis,” Chalmers said.
Chalmers said the New Zealand telecommunications market continued to change rapidly, and as a result TeamTalk faced “many headwinds”.
“In particular, the UFB network has created pressure for the owners of competing fibre, including CityLink, which also needs to invest significant sums to underground portions of its Wellington fibre due to the retirement of the trolley-bus network,” Chalmers said.