Telecom and AAPT silent on end to buy-up impasse

By Richard Braddell

WELLINGTON - Both Telecom and AAPT have declined to confirm if a shareholding hiatus that has left Telecom stalled with 19.9 per cent of Australia's third-largest telecommunications carrier is nearing an end.

AAPT's chief executive, Larry Williams, has been cited as saying that the impasse could be resolved as early as next week, either through a share placement or a takeover bid.

Telecom has adopted its usual no comment stance, while AAPT executives authorised to comment were unavailable.

However, logic suggests that something could happen soon given that the four months in which Telecom is barred from raising its AAPT stake at anything less than the $A5.70 a share it paid for its 19.9 per cent stake ends on October 4.

At $A5.70, Telecom paid considerably in excess of the market, then and now, despite AAPT's shares firming to $A5.12 in recent days following an unexpectedly good $A29.5 million full-year profit announced last week.

The four-month embargo can be circumvented if agreement on a lower price is reached between Telecom and the two other major shareholders, Cable & Wireless and AAP Communications Holdings Optus, which hold 10.6 per cent and 17.3 per cent respectively.

But in spite of what are said to be numerous discussions, there has been no deal to date, presumably because of disagreement over price, although a compromise may prove more attractive as the October 4 deadline looms.

In May, during the C&W Optus bid that was blocked by Australia's competition watchdog, the ACCC, AAPT was independently valued by Grant Samuel and Associates at between $A6.04 and $A7.01 a share.

However, as one observer said yesterday: "The market doesn't seem to think so."