Telecom considers sale of Yellow Pages

Telecom isn't ruling out a sale of its lucrative Yellow Pages directories business, with analysts predicting a sale price of more than $1 billion.

Chief financial officer Marko Bogoievski told the Dominion Post newspaper he wouldn't rule out a sale, some of the proceeds of which could be used to fund a share buy-back

The directories business turned over $248 million in the year to June.

Sydney-based ABN-Amro telecommunications analyst Ian Martin said its ebitda (earnings before interest, tax, depreciation and amortisation) would be about half that and a "good price" of 10 times earnings would see the business fetch $1.2 billion.

If Telecom was offered less than eight times earnings, or $1 billion, "they shouldn't sell it", he said.

Media companies Fairfax and APN top the list of prospective buyers, with Fairfax chief executive Joan Withers saying the publisher would never rule out an opportunity without having a good assessment of it.

Telecom grew its directories revenue 8.3 per cent or $19 million last year, thanks to an increase in the number and price of print advertisements in the Yellow Pages and growing revenues from on-line advertising.

- NZPA