Infratil Ltd (ASX:IFT) has confirmed media speculation this morning that they are in discussions to potentially acquire Vodafone New Zealand from Vodafone Group Plc.
Infratil is a New Zealand-based infrastructure investment company. It owns a range of diversified assets including airports, electricity generators, retailers, and a public transport business. Its operations cover New Zealand, Australia and the US. Infratil currently has a market capitalisation of $2.43 billion.
ACCC Denies TPG-Vodafone Merger
This news has closely followed the ACCC decision to rule out a merger between TPG Telecom Ltd (ASX:TPM) and Hutchison Telecommunications Ltd (ASX:HTA), the owner of Vodafone.
Although this decision surprised many analysts, it seems Vodafone is still a target for an acquisition.
What Did Infratil Actually Say?
Infratil made an announcement in response to “media speculation”, confirming that “it and another party are in discussions with Vodafone Group Plc (Vodafone)” to acquire Vodafone New Zealand.
Infratil stressed that the discussions are still at a very early stage and it will continue to update the market.
“The discussions with Vodafone and financiers are ongoing and incomplete and may not result in a transaction occurring”, the statement said.
Is This Likely to Go Ahead?
It is far too early to say whether this transaction could go ahead. There are currently legal challenges underway regarding the TPG-Vodafone merger and Vodafone may not be looking to sell any part of the business until that verdict is delivered.
However, the Vodafone Group 2018 annual report does show that Vodafone New Zealand is stuck in a period of slow growth and was weighing down other segments of the business last year.
The annual report states: “In New Zealand, service revenue declined 0.5%, with growth in mobile offset by pressure in fixed. We continue to explore a potential Initial Public Offering (IPO) of Vodafone New Zealand.”
This could be taken as a sign that Vodafone Group may be looking to offload Vodafone New Zealand, but again it’s too early to speculate on the Infratil acquisition.
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Disclaimer: Any information contained in this article is limited to general financial/investment advice only. The information has not taken into account your specific needs, goals or objectives, so please consider consulting a licenced and trusted adviser before acting on the information. Please read The Rask Group’s Financial Services Guide (FSG) for more information. This article is authorised by Owen Raszkiewicz of The Rask Group, which is a corporate authorised representative No. 1264179 of Strawman Pty Ltd (ACN: 610 908 211) (AFSL: 501 223).
Disclosure: At the time of writing, Max does not own shares in any of the companies mentioned.