VOD Vodafone Group PLC

   By Rebecca Thurlow 
 

SYDNEY--Three New Zealand companies are seeking to challenge a tie-up between Sky Network Television Ltd. (SKY.NZ) and Vodafone PLC (VOD.LN).

Vodafone announced plans in June to add pay TV to its New Zealand operations through a 3.44 billion New Zealand dollar (US$2.49 billion) merger of its local unit with Sky Network Television, as the world's big telecommunications companies continue to pivot toward TV and online video. New Zealand's antitrust regulator, the Commerce Commission, is due to make a decision on Feb. 23 on whether the deal can go ahead.

Sky and Vodafone have received letters from legal counsel representing telecom company Spark NZ (SPK.NZ), electricity company Trustpower (TPW.NZ) and InternetNZ requesting assurances that Sky and Vodafone refrain from completing the merger if the commission gives clearance, for a period of time that will allow the parties to challenge the decision in court.

Sky and Vodafone have declined to provide the requested assurances, and plan to proceed with the completion of the merger if the commission approves the deal, Sky said in a regulatory filing.

"Counsel for Spark indicated in their letter that if the assurances aren't provided they anticipate being instructed to seek an interim stay," Sky said.

"Sky doesn't consider that there is any proper basis for seeking an interim stay from the courts and, should any party seek an interim stay, Sky intends to oppose any such application and seek an undertaking as to damages."

The Commerce Commission in October said it was concerned the deal could crimp competition in the country's telecommunications and pay TV services markets. In particular, it worried about the ability of the merged entity to use ownership of content - particularly live sports - to make buying Sky on a standalone basis less attractive than buying it in a bundle with Vodafone's broadband and mobile services.

- Write to Rebecca Thurlow at rebecca.thurlow@wsj.com

(END) Dow Jones Newswires

February 15, 2017 16:42 ET (21:42 GMT)

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