Telecom and Optus reportedly talking over AAPT deal

Telecom is pushing Optus on price over a potential sale of its struggling Australian subsidiary AAPT, according to a report in The Australian newspaper.

The newspaper said Telecom was in talks with Optus and junior listed telco SP Telemedia about a sale that could be worth as much as A$850 million ($917.8 million) to offload its struggling Australian business.

The Australian said Optus has made an opening bid of A$650 million, but Telecom has set a A$1 billion bottom line price for a sale.

Telecom bought then-listed AAPT six years ago at the height of the telecommunications boom in a hostile takeover, for a total of $2.2 billion. AAPT was written down in Telecom's books in 2002 but is still valued at $1.4 billion. Analysts have said that's about double its maximum value.

Optus attempted to acquire AAPT in 1999 but the move was opposed by the competition regulator.

Telecom revealed last month it had been in talks with other parties about a sale of alliance of AAPT -- which is the number three fixed-line telco in the Australian telecommunications market.

In the September quarter, AAPT's operating revenue fell 9 per cent to A$296 million ($321 million) and its operational earnings fell 38.1 per cent to A$29 million.

- NZPA