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Telecom reaches for Sky

By Phil Boeyen, ShareChat Business News Editor

Wednesday 21st February 2001

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After a rumoured failed attempt last week to grab a share of Sky Television (NZSE: SKY), Telecom (NZSE: TEL) has announced it has bought 12.12% of the pay-TV operator for $192.6 million.

Telecom says it has purchased the shares from investment company Tappenden Holdings, a private firm controlled by Alan Gibbs and Trevor Farmer. Sky's main shareholder is Independent Newspapers (NZSE: INL) with around 49% and Todd Corp has 11%.

The price for the Sky stake at $4.12 a share is a 37 cent premium to Wednesday's closing price of $3.75.

CEO Theresa Gattung says the shareholding will support the ongoing development of the business relationship between Telecom and Sky.

"Our investment in Sky supports Telecom's transformation into an online and communications group, at the forefront of convergence in Australasia."

"We are forming strong relationships with other key players in dynamic markets for communications, information and entertainment services."

Last week Telecom announced it planned to begin bundling phone, internet and TV services together for sale nationwide following a successful trial.

The move puts it on an even footing with rival TelstraSaturn, which already offers similar packages in Wellington and is expanding its services to other parts of the country.

Telecom also has a 10% stake in INL.

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