Spark of Interest as Private Equity Reportedly Looks At Buyout

Anyone read the article 2 days agon on the below?

That plus the HTA.ASX 3.2 cents bid that SPK hold 10% stake in maybe SPK has turned the corner

Spark of Interest as Private Equity Reportedly Looks At Buyout | MarketScreener

Spark of Interest as Private Equity Reportedly Looks At BuyoutPublished on 05/20/2025 at 09:20 ShareThe $3.7 billion Australia and New Zealand listed telecoms company Spark New Zealand Limited (NZSE:SPK) is understood to have at least two private equity firms running the ruler over the business for a buyout proposal. It comes as the group has an auction afoot through Jarden for its data centre assets, with hopes that they may fetch a price of about $800 million. DataRoom understands that buyout funds with expertise in telecommunication businesses are doing work on whether to make an offer for the largest telco across the Tasman that was previously owned by the New Zealand government.Funds that have experience running telcos abroad and previously bid for Australian telco Vocus when it was listed included Kohlberg Kravis Roberts and EQT, along with private equity firm Affinity. Brookfield is not a contender, but BGH Capital may be looking, along with TPG Capital, although some observers believe the business would be too operational for those parties. Well-connected sources believe any suitor would likely take the view that a deal could stack up at NZD 2.50, but not at NZD 3, so that means its share price would need to fall below NZD 2 - it's currently trading around NZD 2.18, or $2 in Australia.Yet Spark remains under pressure with large levels of debt (net debt was at almost NZD 1.7 billion at December), and it is a situation which has prompted the group to sell its capital-intensive data centres. Should it fail to achieve its price ambitions, an equity raising may need to occur, which could come at a deep discount, pushing its share price lower. Also in question is how long chairman Justine Smythe remains, with suggestions surfacing that her departure could be imminent.Australian-listed telecoms giant Telstra is understood to have weighed an acquisition of New Zealand counterpart Spark in recent years, sources say. However, it is understood to have passed on the opportunity, determining it was not the right priority for the No.1-listed Australian telco player, which has about 40% of the local market share. Some private equity firms have also shied away, not wanting such a large exposure to the New Zealand market.Also, some industry operatives question where the value will be for a private equity buyer, with many of the costs recently stripped out. But others believe in private hands, operatives can substantially lift the financial performance. A buyout fund would also need to consider what its sale options would be in future years, with another listing its likely only option, as Asian telcos are also adverse to major New Zealand investment.