Spark chief financial officer David Chalmers says it won't be increasing its $22.7 million offer for TeamTalk based on what it has seen so far despite criticism from the company that it is "woefully inadequate."

The telco giant confirmed its formal offer for communications company TeamTalk today at 80 cents per share; a 78 per cent premium to what shares were trading at before Spark announced its intentions in February.

The deal would give Spark ownership of fibre in Wellington and a wireless rural internet service provider.

Spark has indicated it wants to integrate TeamTalk's services into the larger group, cutting costs by stripping out any duplication and reviewing the business to see what parts of the Wellington-based network can be grown and whether any units should be divested.

Advertisement

But TeamTalk directors said today that they viewed the offer as "inadequate and significantly below fair value."

TeamTalk chairman Roger Sowry said it had provided Spark with confidential and sensitive due diligence information to assist them to increase their offer significantly
above $22.7m for all the shares of TeamTalk.

"We also updated the market with profit guidance to 30 June 2018 last week as part of our interim results and turnaround plan update.

"Spark appears to have ignored the information we have made available. Their tactics continue to be predatory and highly opportunistic."

Chalmers confirmed today that based on what Spark had seen to date the $22.7m was all it was prepared to pay.

"This has been a long process. TeamTalk has sought to characterise us as opportunistic but the reality is we have been talking to them for nine months."

Chalmers said it felt the company had unrealistic expectations of where the business was at currently and was basing too much of the company's worth on past history.

Instead it had decided to put the offer directly to TeamTalk's shareholders.

The company has around 1500 investors, including the Accident Compensation Corporation.

TeamTalk has urged its shareholders to hold off making any decision before an independent report is released on March 23 as part of its target company statement.

Grant Samuel has been appointed to write the independent report.

Chalmers said its offer closed on April 22 and the company was focused on getting to the 90 per cent acceptance rate needed to make the takeover.

It will also need Commerce Commission approval to proceed, and may waive a condition to cross the 90 per cent threshold needed to mop up holdout shareholders if it secures control of TeamTalk, in which case it would stack the board with its representatives.

Spark has previously signalled a desire to reduce its reliance on network operator Chorus' regulated copper lines and last year talked up the opportunities wireless broadband offers to grow the budget end of the market.

TeamTalk shares were up 1c to 78c by lunchtime today.

- additional reporting BusinessDesk