Telecom in line for bigger slice of INL

By GEOFF SENESCALL

Telecom is expected to stand in the market today for more shares in the media group Independent Newspapers.

It is understood institutions were approached last night with an offer of 425c a share. Telecom is thought to be considering taking its holding to at least 10 per cent in a bid to cement its influence over one of New Zealand's main media organisations.

Its move comes nearly two months after snaring a 5.7 per cent shareholding through a stand in the market at 425c. Telecom is thought to have been disappointed it did not get more shares at the time.

In the past couple of weeks, Telecom has been quietly mopping up parcels of shares of 100,000 or more, according to brokers. It has been paying between 390c and 400c.

Being a substantial security holder, with more than 5 per cent, Telecom must notify the market of every 1 per cent movement in its holding. So far, no further notices have been filed.

The INL stake gives Telecom a strategic foothold in the rapidly converging telecommunications and media industries.

When the initial purchase was made, Telecom's chief executive, Theresa Gattung, said the deal was further evidence of the group's transition from a traditional telecommunications company to a "serious online and solutions player."

Though INL owns publications such as theEvening Post, the Dominion and the Press, it is thought Telecom's main motivation is to get closer to the pay TV operator Sky TV, of which INL owns just under half.

The decision to take an equity holding in INL follows Telstra's alliance with Saturn Communications, which is rolling out cable in Wellington and Christchurch for online services including internet and television.

Curiously, this latest swoop comes just after INL's 49 per cent shareholder News Corp announced plans to spin off its global satellite and pay-TV assets into a separate listed entity called Platco. This has raised speculation in the market about what News Corp's Rupert Murdoch might have in mind for Sky TV. Across the Tasman, News Corp had wanted to include Australian pay TV group Foxtel. But a wrangle between its shareholders, Telstra, News Corp and Kerry Packer's Publishing and Broadcasting, has stymied this for now.

Platco will be centred on News Corp's BSkyB and Star TV pay TV stations, the American TV Guide magazine and News Digital Systems, which makes set top boxes used to receive cable and satellite channels.