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Telecom is set to take a bigger stake in the Australian telecommunications market after PowerTel shareholders accepted a A$357 million ($404 million) takeover offer.
At a meeting yesterday, shareholders in Australia's second largest fixed-line broadband company voted in favour of a scheme of arrangement for 100 per cent of the company - pocketing A$2.30 per share.
The offer is more than double PowerTel's share price late last year but only slightly above recent trading.
PowerTel directors had unanimously recommended the deal and warned that the company share price may fall below A$2.30 if the scheme was not approved.
No superior proposals had emerged, the company said.
PowerTel managing director Paul Broad says it will be business as usual until final court approval of the deal early next month.
Broad said preliminary figures for the first three months of the year show strong revenue growth and earnings before interest, tax, depreciation and amortisation up 24 per cent on last year.
Telecom plans to merge PowerTel with its poorly performing AAPT unit, which it had previously tried to sell.
The company bought AAPT for $2.2 billion in 1999 but after writedowns, values it at just $270 million.
Under the proposal, AAPT would still manage its retail operations and PowerTel would remain in charge of providing wholesale data, fixed-line voice and internet services.
AAPT has an existing deal for its customers to access PowerTel's high-speed broadband network. Telecom shares closed up 6c at $4.96.
