Telecom Corp of New Zealand Ltd has been sold in its entirety to Bell Atlantic Corp and Ameritech Corp for the equivalent of $2,540m. According to Richard Prebble, minister for state-owned enterprises, the sale requires each US company to reduce its holding to 25% over the next three years. During that three year period the New Zealand investment banking company Fay, Richwhite Holdings Ltd and transport and security firm Freightways Holdings Ltd, (which put in bids for the company, CI No 1,424) will each hold 5%. The 40% balance will be sold to the New Zealand public and international investors through a series of share offerings. The sale of the company was hit, shortly before bids closed, by the leaking of a government profit forecast for the coming year which was substantially lower than Telecom’s own predictions, and by the late entry (gossip says a day after bids officially closed) of the New Zealand company Fletcher Challenge Ltd. Fletcher wanted a 50.1% stake of a Telecom holding company held jointly with the New Zealand public, but its offer was less than the $2,000m to $4,000m the government wanted to raise from the sale. Other disappointed losers were Brierley Investments Ltd, Southwestern Bell, Cable & Wireless and the Australian OTC.
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