Vodafone Australia Buys N.Z. Business From British Parent for A$1.25 Bln
By Duncan Craig
Vodafone Australia Buys N.Z. Unit for A$1.25 Bln (Update2)
(Adds background from 15th paragraph.)
Sydney, Aug. 17 (Bloomberg) -- Vodafone Airtouch Plc, the
world's largest provider of wireless-phone services, said it will
combine its New Zealand and Australian operations, increasing the
value of the Sydney-based unit's planned share sale 30 percent.
In agreements valued at A$1.25 billion ($810 million),
Vodafone Holdings Australia, the nation's third-largest cellular
company, will acquire all the shares of unlisted unit Vodafone
New Zealand Ltd. and 49 percent of Vodafone Fiji, the U.K. parent
company said.
Vodafone Airtouch had planned to sell shares in Vodafone
Australia next year, which analysts estimated could raise more
than A$2 billion for 20 percent of the business. With the New
Zealand unit, the operations will have close to 1.3 million GSM
cellular phone customers, boosting the IPO value to more than
A$2.6 billion, using current valuations for wireless companies.
``It puts a bit more sex appeal into the float next year,'
said Mitchell King, chief operating officer at Australian
Infrastructure Ltd., which owns just under 1 percent of Vodafone
Australia.
Vodafone New Zealand had 181,000 GSM cellular phone
customers at March 31, though analysts say it's rapidly
approaching 250,000 customers, and will likely have 500,000
subscribers by June 30 next year. It was acquired by Vodafone
AirTouch, then Vodafone Group Plc, in October 1998, for NZ$750
million from based BellSouth Corp. and Singapore Technologies
Telemedia.
Cell Phone Use
The New Zealand unit has added 70,000 customers in the seven
months since November as cellular phone usage in the country has
risen from 17 percent to 23 percent of the population. That's low
compared with Australia, where 33 percent of the country's 18
million people use cell phones.
``The agreements will allow us to realize synergies in the
region, to build critical mass in our operations and customer
base and to rationalize the group into one regional structure for
the future,' Vodafone Australia Chief Executive Brian Clark said
in a statement.
Analysts have valued Vodafone New Zealand at between A$2
billion and A$2.5 billion, based on current valuations per
subscriber of A$9,000 to A$10,000 per subscriber. Australian
Infrastructure's King said the Vodafone New Zealand acquisition
values its subscribers at only A$5,000 each.
``It represents a nice deal in a growing market where
competition is less intense than in other places,' King said.
Telecom Corp. of New Zealand, the nation's No. 1 phone
company, said today its cellular phone sales in the quarter to
June rose 17 percent to NZ$130 million, on more than 700,000
subscribers.
Vodafone Fiji had 8,000 subscribers at March 31.
Share Value
The attractiveness of the purchase price is also borne out
by the stock price of Mobile Communications Holdings Ltd., which
has a 5 percent stake in Vodafone Australia. It last traded at
A$13 on Aug. 12, which values the whole of Vodafone Australia at
A$13 billion, or about A$12,000 per subscriber.
Vodafone AirTouch, which has almost 28 million customers
worldwide, said the transaction is subject to regulatory approval
and the public listing of Vodafone Australia.
The U.K. company hasn't decided how much of the Australian
unit it will sell, though it plans to retain at least a 51
percent stake.
The initial offering of Vodafone Australia is part of the
parent company's strategy of selling shares of its foreign
businesses to local investors. Last year, Panafon Hellenic
Telecommunications SA, the largest Greek cellular company that is
majority-owned by Vodafone, sold shares. Libertel Groep, No. 2 in
the Netherlands, had an initial public offering in June.
Vodafone AirTouch didn't receive proceeds from either IPO
because they consisted of shares sold by its partners in the
ventures. |
