Verizon sells more Telecom shares

By Phil Boeyen, ShareChat Business News Editor

Friday 11th January 2002

Telecom's (NZSE: TEL) largest shareholder, Verizon, has sold a further 1% of its holding in the New Zealand telco for an average price of $4.65 a share.

The US communications giant, formed through a merger between Bell Atlantic and GTE, issued a notice on Friday saying it had sold 17.6 million Telecom shares on market for around $81.8 million.

All the sales had been since the end of September last year on the New Zealand Stock Exchange.

Bell Atlantic is an original investor in Telecom and has previously said it has received an annual compound return on its investment of around 25% a year.

However the company is understood to be interested in divesting the stake altogether and Telecom chief Telecom chief executive Theresa Gattung was quoted last year saying that the Verizon stake was likely to be sold either in bits or as a strategic stake.

Verizon's last market notice of a change in shareholding was last September, when it announced it had cut its 24.95% stake to 22.5%, selling 19.25 million shares for an average price of around $5.35.

Forsyth Barr market analyst Rob Mercer says Verizon is likely to be trying to cut its stake to below the 20% threshold.

Taking into account new share issues from Telecom, Verizon now holds 21.5% of the company.

Telecom shares have had a strong start to 2002 after announcing increases in mobile and fixed line charges. The stock is also benefiting from a general perception that it is undervalued compared to its international peers.

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