News
26/03/2007 - Telecom sells Yellow Pages for $2.24b
Telecom has sold its Yellow Pages directories business to Hong Kong-based private equity fund CCMP Capital Asia and Canada's Teachers' Private Capital for $2.24 billion.
Telecom said the price was comprised of $2.165 billion in cash plus $75 million of Yellow Pages debtors being retained by Telecom.
Chairman Wayne Boyd said Telecom looked forward to maintaining a close relationship with Yellow Pages. Investors are expecting Telecom to use up to half the proceeds to fund a share buyback.
Yellow Pages comprises the yellow and white pages in print and online, the 018 phone directory service, local directories, New Zealand Retirement Guide and New Zealand Tourism Online. It has about 600 staff.
CCMP was formerly part of JP Morgan Partners. Teachers' Private Equity is the private investment arm of the Ontario Teachers' Pension Plan.
Final bids from CCMP and the three other short listed bidders were filed with Telecom's adviser, investment bank Goldman Sachs JBWere, last Thursday. CCMP fought off CVC Asia Pacific, Kohlberg Kravis Roberts & Co and a partnership between Pacific Equity Partners and Bain Capital.
Telecom hired Goldman last November to sell Yellow Pages. Goldman whittled down around 10 initial bidders, including Australian telecommunications group Telstra, to the short-list in February.
Telecom told potential buyers in an information memorandum Yellow Pages' revenue would rise 13 per cent in the June year to $280 million. It expected earnings before interest, tax, depreciation and amortisation (ebitda) to increase 8 per cent to around $160 million.
At almost 60 per cent, Yellow Pages' margins, on an ebitda basis, are higher than those of its Australian equivalent Sensis, Britain's Yell and France's PagesJaunes.
Telecom expects the deal to be completed by the end of April subject to Overseas investment office approval.
Telecom will reveal its plans for the sales proceeds at its third quarter results briefing on May 3.
http://www.stuff.co.nz/4006129a13.html
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