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2degrees' parent in trading halt as market awaits Orcon merger news

2degrees' parent in trading halt as market awaits Orcon merger news

Anticipated IPOs on the NZX appear to be off the table, for now.

Credit: IDG

Trading of shares in the parent of New Zealand telco 2degrees has been halted by Canadian regulators as news breaks of merger talks with Orcon, formerly known as Vocus NZ.

The Investment Industry Regulatory Organization of Canada (IIROC) put a stop on trading of Trilogy International Partners on the Toronto Stock Exchange this morning, NZ time, due to "pending news".

[Update, Trilogy has now commented: "Trilogy International Partners has announced today that it has paused activity on an initial public offering of the shares of Two Degrees Group Limited, its New Zealand subsidiary offering mobile and broadband communications services, in order to consider a possible alternative transaction with another party. Trilogy expects to provide additional details in the next several days regarding such a transaction or to resume activities with respect to the initial public offering of Two Degrees shares."]

Reports out of Australia late yesterday indicated Orcon's owners, Macquarie Group asset manager MIRA, was in talks with Trilogy to combine their New Zealand telecommunications groups, once again stymying much anticipated new listings of both companies on the New Zealand Stock Exchange (NZX).

The Australian Financial Review's take on the development was "sanity prevails", because the near simultaneous listings were competing with each other.

The two companies are seen as highly complementary, with 2degrees strong in mobile and consumer segments and Orcon strong in fibre-based internet services and business.

2degrees was to list on both the Australian and New Zealand bourses by the end of the year, Trilogy announced in May.

However, Orcon's owners had already appointed Goldman Sachs, Jarden and Craigs as lead managers for the listing of its New Zealand business last November.

The initial public offering (IPO) was also expected to be undertaken before the end of 2021. Orcon was valued at $598 to $783 million by investment bank UBS two weeks ago.

Yesterday, Orcon reported its results for the year ended 30 June, including a significant increase in profit.

Revenues were up slightly from $402.4 million to $416.8 million, however, profit before tax was well up from $21.5 million to $36.3 million as was net profit after tax, from $15.3 million to $25.5 million.

The accounts also noted other income from hedging transactions that could be reclassified to profit or loss of $34.9 million. The net profit attributable to shareholders including those sums was, therefore, $60.4 million, up from $18.1 million.

Cash and its equivalents was well down from $22.7 million to $4.9 million.


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Tags TelecommunicationsVocusOrcon2degreesTrilogy International Partners

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