The world's largest asset management company, United States-based Black Rock, has grabbed a 5%, $250 million stake in Telecom after 16 of its global subsidiary companies purchased shares recently.
Black Rock becomes the third or fourth largest shareholder in Telecom, prompting talk in the market of a takeover ploy for New Zealand's largest listed company; which is about to be demerged and split into two listed companies.
In a notice to shareholders released by Telecom early yesterday, it listed 16 Black Rock companies around the world, including from Canada, Australia, Japan, the UK, Germany and the Netherlands, most of which purchased a less than 1% stake in Telecom - but totalling 5% in all.
The 96.2 million shares were valued at $253 million, based on yesterday's trading price, which was up 0.5% after the announcement at $2.63.
In late October, Telecom shareholders voted overwhelmingly in favour of splitting the company into two separate listed businesses; its retail, mobile, IT and internet business to become New Telecom and its network-lines business becoming New Chorus - scheduled to demerge on November 26.
Black Rock, along with other existing shareholders, will get one new Chorus share for every five existing Telecom shares.
Craigs Investment Partners broker Chris Timms discounted market speculation yesterday of a takeover bid at this stage.
He said while Black Rock had a history of "predatory behaviour" , at this early stage, it just appeared to be taking a substantial holding in Telecom.
Any further incremental gains of 1% must be reported to the market, Mr Timms said.
Black Rock's motivation might have been it seeing Telecom shares being undervalued in general, the imminent split offering increased value, or simply that as a network-lines business, Chorus would become a sound, defensive, utilities stock.
It was likely Black Rock used 16 subsidiaries to acquire the shares, not because of any stealth motivation but in order "to spread the investment over a variety of global funds, which could mitigate any investment risk in the future", Mr Timms said.
Black Rock, which in a quarterly report last month said it had $US3.66 trillion ($NZ4.59 trillion) of global assets under management, employs 9300 people in 26 countries spread throughout North and South America, Europe, Asia, Australia, the Middle East and Africa.
Black Rock's client base includes corporate, public, union and industry pension plans, governments, insurance companies, third-party mutual funds, endowments, foundations, charities, sovereign wealth funds, banks and individuals, according to its website.
