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Telecom shareholders reject Elliott nominees for board

By Paul McBeth

Thursday 2nd October 2008

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Telecom shareholders rejected Elliott International's two nominees for the board at today's annual meeting, re-electing Rod McGeoch and Kevin Roberts instead.

Some 65% of the company's shares were voted at the meeting. US investment group Elliott was pushing for the break-up of Telecom rather than the structural separation it is undertaking under a government edict.

Telecom's stock rose 1.4% to NZ$2.86 and has lost about a third of its value this year. It is the biggest company on the NZX 50 Index.

"While we recognise the significant time and effort that Elliott has gone to in evaluating the potential benefits of structural separation" it isn't the right time to revisit that option, Boyd said.

Since increased regulation in the sector forced Telecom to separate its retail and wholesale business, the company's profits have fallen as it lost market share, driving down its share price.

Elliott International had said Telecom was underperforming and it was dissatisfied with the company's performance. Boyd said he is confident the strategy will see a return in shareholder value, as the company "remains well financed and in a strong position."

"We reiterate that, subject to any material change in circumstances, we intend to pay shareholders quarterly dividends of 6.0 cents per share for the next two years," said Boyd.

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