The deal values One NZ (formerly Vodafone) at $5.9 billion. Photo: RNZ / Nate McKinnon
Infrastructure investor Infratil is to take full ownership of telecommunications provider One NZ in a $1.8 billion deal.
Infratil currently owns about half of One NZ (formerly Vodafone) with the remainder being owned by Canadian investors Brookfield Asset Management.
Infratil said it had agreed to buy Brookfield's ownership stake, and would raise $850 million to fund the deal, with the balance from cash reserves and borrowings.
The acquisition valued One NZ at $5.9b.
"Further investment in One NZ is strategically and financially compelling for Infratil and our shareholders," Infratil chief executive Jason Boyes said.
"One NZ has had strong momentum following the recent rebrand and other business transformation initiatives that are ongoing, with further upside to be realised," he said.
Infratil chief executive Jason Boyes Photo: Supplied
Boyes said full control of One NZ provided Infratil with greater business plan and capital allocation flexibility and a renewed focus on creating long-term value.
"The equity raise is a $750 million underwritten placement, which happens today, and then a $100 million retail offer that runs until 27 June and is not underwritten," he said.
The placement will be conducted through a bookbuild with eligible investors invited to take part, Infratil said.
To raise the $750m it will issue 81.5 million new shares at a price of $9.20 per new share, an 8.9 percent discount on the closing price on Tuesday.
Infratil and Brookfield bought One NZ from its British parent in 2019 for $3.4b.
'Vote of confidence'
One NZ chief executive Jason Paris said Infratil's increased investment was a "huge vote of confidence" for the company.
"[The investment] means this important New Zealand company will be 100 percent locally owned and managed for the first time," Paris said.
One NZ reported a 9.7 percent increase in full year underlying profit net profit to $527.8m in the year ended March, a $46.8m gain on the year earlier.
Underlying costs, excluding $28m of costs related to the rebranding of the company name, remained stable as the telecommunications company focused on cost control amid building inflationary pressures.
One NZ invested $300m on a number of capital projects including 294 new and upgraded 4G and 5G sites across the country.
Its underlying profit outlook for FY2024 was in a range of $580m to $620m, a midpoint gain of 4 percent on FY2023, with an ongoing focus on a leaner business to drive cost savings and improved customer service.
One NZ has partnered with SpaceX to deliver 100 percent mobile coverage to New Zealand later this year via the Starlink network of low Earth orbit satellites.
One NZ also sold its passive tower network assets in the year just ended for $1.7b to a group of investment funds.