Power utility firm Infratil has revealed it is in talks with Vodafone Group to buy the telecom giant's New Zealand operations.
Infratil said in an NZX statement that it and another party - reported to be Canadian investment company Brookfield - were in discussions "regarding a potential transaction involving an acquisition of Vodafone New Zealand".
"The discussions with Vodafone and financiers are ongoing and incomplete, and may not result in a transaction occurring."
The move, if completed, will dash hopes for a sizeable listing on the New Zealand stock exchange.
The talks come as Vodafone NZ undergoes a major restructure to improve profitability ahead of a long-planned divesture from its UK parent after a planned merger with Sky TV was blocked.
Following that Commerce Commission decision, the telco raised the prospect of floating its New Zealand busines late last year, with a global roadshow for potential investors.
That effort was a sounding-out process, and did not include a mooted IPO value (although documentation released during the failed Sky merger valued Vodafone NZ at $3.44b).
However, the company got the cold shoulder from investors.
Chief executive Jason Paris's mission is to make the telco a more attractive proposition - by taking an axe to costs, then seeking new digital opportunities.
For 2017 (its most recently reported financial year), Vodafone NZ made a profit of $57.5 million, turning around a loss of $18.3m. Revenue increased 2.8 per cent to $2.05 billion.
This latest development with Infratil entering the fray could explain why Paris recently delayed his restructure update with media from end of April to "a few weeks time".
Infratil was put on a trading halt by the New Zealand stock exchange. The stock last traded at $4.60.
Buying into Vodafone would not be Infratil's first tech investment.
In 2016 it bought a half share in Canberra Data Centres for A$392m and a year later invested a further A$50m to help fund its on-going growth.
And when Vocus put its NZ assets (Orcon, Slingshot) on the block, Infratil was one of the rumoured bidders. The Vocus board eventually ended the process without a buyer.
Infratil CEO Marko Bogoievski knows telcos from a previous stint at Telecom under Theresa Gattung.
Infratil chief executive Marko Bogoievski was one of Theresa Gattung's top lieutenants at Telecom before he left in 2007.
The Australian Financial Review earlier reported that Infratil's investment manager Morrison and Co and Canada's Brookfield Asset Management were in "late-stage talks" to buy Vodafone NZ in a 50:50 joint venture in a deal thought to be worth A$2.5 billion.
Vodafone New Zealand declined to comment. Brookfield was not immediately available to comment.
Lenders have reportedly lined up a funding package that includes about half a dozen banks and "were working through due diligence materials" in an effort to firm up their interest, the AFR said.
Deutsche Bank is advising Vodafone.
Earlier this week, the Australian Competition and Consumer Commission blocked a A$15 billion merger of TPG Telecom and Vodafone's Australian business, arguing it would reduce competition.
