Zintel expects $15.3M from Australian sale, more than its market cap; shares soar 82%

Thursday 1st March 2012

Zintel Group is to sell its Australian toll-free calling business for $15.3 million to Delaware-based j2 Global, a price that exceeded the New Zealand business phone company’s market value by $2 million. Zintel shares soared 82 percent.

Auckland-based Zintel got a waiver to clinch the deal because under NZAX listing rules a company can’t do a deal worth more than 50 percent its market capitalisation without prior approval of shareholders or what’s known as a Pre Break announcement.

In support of the waiver application, Zintel said the deal was supported by shareholders with 61 percent of the stock. Prior to the share spike, Zintel’s market cap had averaged $12.87 million over 20 days.

Zintel said it hadn’t planned to sell the Australian business but was approached by j2 Global with a cash offer.

“The approach from j2 was considered attractive relative to the total market capitalisation of the group,” said chairman Nick Gordon.

“With existing cash reserves, the group has no need for additional funds and therefore intends to distribute a considerable portion of the sale proceeds to shareholders,” he said. Details have yet to be finalised.

The share surge will be welcome news to the company, which noted at the release of its first-half report that its market value was less than the realisable value of its businesses and net cash on hand.

(BusinessDesk)

BusinessDesk.co.nz

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