Telecom announced this morning that it intends to make a takeover offer for the 20% of shares in AAPT that it does not already own.
Telecom Chief Executive Theresa Gattung said in a statement that the company's wholly-owned Australian subsidiary TNZ Australia will offer minority shareholders $A7.25 in cash for each AAPT share.
Telecom says the offer price represents a 23.5% premium to the volume weighted average trading price of the shares over the three months ending 14 August 2000.
The offer will be subject to a number of conditions
Gattung said that acquiring the balance of AAPT shares would enable Telecom "to take real advantage of synergies that are increasingly evident, especially in the high growth areas of data and mobile communications, and Internet services.
"Following our recent success securing the provision of integrated telecommunications services to Commonwealth Bank, it has become clear to Telecom that our ability to further grow and develop the business in Australia will be enhanced by having full ownership of AAPT.
"We will also have greater flexibility to develop our businesses on a regional basis and to make the best strategic plays open to us going forward."
Industry rumours have recently linked Telecom to a regional alliance involving Japan's mobile communications powerhouse NTT DoCoMo and Australia's C&W Optus, and also the US telco MCI WorldCom.
The cost to Telecom of acquiring all minority shares in AAPT will be around $ A444 million (excluding executive share options), and it will be funded by additional borrowing which can be accommodated on the Telecom group balance sheet.
Gattung said formal offers would be sent to the minority shareholders shortly, together with a bidder's statement.
TNZ Australia acquired an initial 9.9% shareholding in AAPT in May 1999 and increased its shareholding to 82% during the second half of 1999 from which level it has subsequently been diluted to 80% through the exercise of executive share options.
Macquarie Bank Limited is advising Telecom on the proposed offer and Salomon Smith Barney is advising AAPT.