Spark NZ seeks court-ordered brief delay on Sky/Voda tie-up

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Monday 20 February 2017 12:09 PM

Spark NZ seeks court-ordered brief delay on Sky/Voda tie-up if approved

By Paul McBeth

Feb. 20 (BusinessDesk) - Spark New Zealand is one of several parties seeking a court order to delay a merger between rival Vodafone New Zealand and pay-TV operator Sky Network Television if the regulator signs off on the deal this week.

Auckland-based Spark said it's asking the High Court to order, if the Commerce Commission clears the merger on Feb. 23, that it doesn't come into effect for 36 hours to give the opposing parties time to read the reasoning behind the decision and decide whether they will pursue legal action.

"This is a question of natural justice: to allow Sky and Vodafone to push ahead with the merger without this breathing space would likely mean the merger would already have been effected, and be difficult to unwind, before opposing parties have had a chance to view the detail reasoning underlying the commission's decision," Spark regulatory general manager John Wesley-Smith said. "We have particular concerns about Sky's monopoly in premium sports content, which means New Zealand sports lovers would be the ones to miss out if the merger went ahead in its current form."

Spark, Internet New Zealand and Trustpower last week asked Sky and Vodafone to voluntarily put off finalising the merger if they got regulatory approval, a request that was rebuffed.

Sky and Vodafone want to create the country's largest telecommunications and media group, with Sky TV buying Vodafone NZ for $3.44 billion, funded by a payment of $1.25 billion in cash and the issue of new Sky TV shares at a price of $5.40 per share. Vodafone becomes a 51 percent majority shareholder in Sky TV, in what amounts to a reverse takeover. The pay-TV operator will borrow $1.8 billion from Vodafone to fund the purchase, repay existing debt and use for working capital.

Spark's Wesley-Smith said the company hadn't decided on whether to pursue legal action to review a Commerce Commission decision, but rather it reflected "how seriously we are taking the proposed merger, which we believe will have significant implications for competition."

Last week, Spark chief executive Simon Moutter said if the deal is approved it would have "a profound impact on the industry structure and industry playing field" and will warrant a "meaningful" response.

Today, network operator Chorus chief executive Mark Ratcliffe said he supported the merger, which would see premium video content shift to an internet-based delivery instead of satellite distribution giving greater flexibility and control to consumers.

"We're very, very keen for more TV to be on our network than on satellite networks," Ratcliffe told an analysts' briefing.

(BusinessDesk)

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