New Zealand’s High Court has brought a temporary halt to the proposed merger of Vodafone New Zealand and satellite pay TV operator Sky TV, ordering a short-term stay to the deal in the event the New Zealand Commerce Commission gives its clearance to the merger on Thursday morning.
New Zealand’s largest telco Spark’s opposition to the proposed merger played out in the High Court yesterday with the Court ruling that Sky and Vodafone are prohibited from completing the merger in reliance on any clearance by the Commission until midnight on the third day after the Commission has delivered the reasons for its decision to the applicants.
Spark welcomed the decision by the High Court and, with the other companies also opposed to the merger - 2 Degrees and Internet NZ - is now considering its legal options.
In a statement issued on Wednesday, Spark general manager regulatory affairs, John Wesley-Smith, said the telco, and the other companies, believe the proposed merger will be bad for consumers – “resulting in poorer choice and higher prices for consumers, especially when it comes to sports content”.
{loadposition peter}“That was at the heart of our decision to take this Court action.
“The stay is important for natural justice and fairness: as it will ensure all interested parties have a chance to properly consider the Commission’s reasoning and make informed decisions on whether to seek a judicial review if there is a clearance decision.
“Without this stay, there was a risk that Sky and Vodafone would immediately take steps to implement the merger and make it a fait accompli – which would render any future legal review a meaningless exercise.”
“We are grateful for the Court and Justice Lang for agreeing to an urgent hearing of the application and issuing a written judgment in an extremely short timeframe.
“We now await the Commission’s decision tomorrow morning (Thursday 23 February) on whether to clear the proposed merger.”
The proposed merger was announced in June last year through a $3.4 billion reverse takeover of Vodafone NZ by satellite pay TV operator Sky TV.
A successful acquisition will see the resulting merged entity majority owned by Vodafone’s parent company in the UK, Vodafone Plc, which will own 51% of the shares, and the merged company becoming a significant threat to Spark as the country’s dominant carrier.
Unlike Vodafone’s operations in Australia, where it is the third ranked mobile player, Vodafone NZ is the largest mobile operator and is the second largest player in the landline broadband space after buying TelstraClear in 2012.