KEY POINTS:
Australian telephone company Telstra is going up against private equity firms to buy Telecom New Zealand's directories business, with indicative bids due this Friday.
Media companies Fairfax and Seven Network have dropped out of the race for New Zealand's Yellow Pages, the Sydney Morning Herald newspaper reported yesterday.
The private equity firms that are interested are believed to include Kohlberg Kravis Roberts & Co, CVC Capital Partners, The Blackstone Group, CCMP Capital, The Carlyle Group and Pacific Equity Partners.
Analysts are expecting the business to be sold for between $1.5 billion and $2 billion and some do not think that Telecom should be selling the business.
Telecom NZ will also report its first-half earnings on Friday, kicking off the reporting season for the December 31 balance date.
Babcock & Brown, which bought a 0.5 per cent stake in Telecom in May last year, is not bidding for the directories business.
The Telstra bid is expected to be via its advertising and directories business, Sensis.
The Yellow Pages group consists of the printed Yellow Pages, White Pages, and their on-line equivalents, Local Directories, New Zealand Retirement Guide and New Zealand Tourism Online.
It has about 600 staff and earned $160 million in the June year before interest, tax, depreciation and amortisation.
Telecom wants to complete any sale by next June.
- NZPA
