Tom Pullar-Strecker at Stuff reports:
Telecom shareholders will be given a share in Chorus and another in the yet-to-be-named retail business for each Telecom share they own, if they approve the company split, which is a condition of Telecom’s government contract to build the bulk of the ultrafast broadband network.
Really? Equal value?
I am not a financial analyst and this should not be taken as financial advice.
But personally I will be looking to buy lots of shares in Chorus, and no shares in Telecom Retail. I think Chorus has a very good future, managing both the copper and fibre.
I am not at all convinced that Telecom’s culture is well developed enough to compete on the retail level, without the integrated vertical monopoly. I hope they do, but at this stage I wouldn’t invest money on it.
A look at the annual regulatory accounts shows that the profit from Chorus as a percentage of turnover is much much higher than for Telecom Wholesale or Retail.