Telecom Welcomes Recommendation Of AAPT Directors

TELECOM WELCOMES RECOMMENDATION OF AAPT INDEPENDENT DIRECTORS TO ACCEPT OFFER

Independent expert finds offer fair and reasonable

Telecom Corporation of New Zealand Limited (“Telecom”) today welcomed the decision of the independent Directors of AAPT Limited (“AAPT”) to confirm their recommendation that AAPT shareholders accept the offer to them by Telecom’s wholly owned subsidiary, TCNZ Australia Investments Pty Limited ("TNZ Australia").

This follows the receipt of the independent expert’s report by Grant Samuel & Associates Limited (“Grant Samuel”) on TNZ Australia’s offer for the approximately 20% of shares in AAPT that it does not already own. Grant Samuel found TNZ Australia’s offer of $7.25 per share was “fair and reasonable.”

Telecom Chief Executive Theresa Gattung said: “In the next week we will make a joint distribution of TNZ Australia's Bidder’s Statement and AAPT’s Target’s Statement, which will include Grant Samuel’s report on the merits of the offer.”

TNZ Australia’s offer of A$7.25 cash per share represents a 23.5% premium to the volume-weighted average trading price of AAPT shares over the three months ending 14 August 2000 and a 42% premium to $5.10 price offered by TNZ Australia in November 1999, under its previous takeover bid. Grant Samuel valued AAPT shares at between A$6.57 and A$7.52.

Ms Gattung said that the unanimous recommendation of the independent Directors of AAPT to accept the TNZ Australia offer was another key step on the way to bringing together the two businesses.

Ms Gattung wished AAPT Chief Executive Larry Williams well in his retirement, as announced today. “Larry signaled earlier this year his intention to return to the United States and we recognise that he sees this as an appropriate time to take that step. We are very pleased to retain Larry’s services as a business advisor over the next few months,” Ms Gattung said.

Disclaimer This media release may contain forward looking statements about Telecom Corporation of New Zealand Limited (“TCNZ”) and the environment in which the company operates. Because these statements are forward looking, TCNZ’s actual performance could differ materially. TCNZ’s regular earnings announcement media releases, management commentaries and various documents filed with the US Securities & Exchange Commission, including the Annual Report on Form 20-F, contain additional information about matters which could cause TCNZ’s performance to differ from any forward looking statements in this release. Please read this release in the wider context of material previously published by TCNZ and filed with the SEC.

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