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Vodafone New Zealand is set to purchase 70 percent of the rural broadband and satellite section ‘Farmside’ of operator TeamTalk for NZ$10 million ($7 million). The acquisition is subject to approval by shareholders. Vodafone NZ has the option to purchase the remaining 30 percent for NZ$3 million within the next three years.

TeamTalk, established in 1994, is New Zealand’s leading mobile radio company, with its main focus on digital trunking communication services. New Zealand telecom operator Spark announced plans to acquire TeamTalk in February in a move to increase its rural coverage of services. Spark said it would purchase TeamTalk for 80 NZ cents per share, which would value the company at about NZ$22.7 million.

The acquisition never proceeded however, because TeamTalk’s board said the offer was “without merit and not in the interests of TeamTalk shareholders.” Therefore, the operator will continue to manage Farmside under a management contract.

Vodafone New Zealand’s stake in Farmside will enable a substantial reduction in debt for TeamTalk and provide a clear path forward for Farmside, said Team Talk CEO Andrew Miller. The deal will also enable Team Talk “to strengthen our partnership with Vodafone, a significant provider to rural New Zealand,” he said.

Farmside has been valued at around NZ$9.6 million to NZ$12 million by an independent adviser, said Vodafone NZ CEO Russell Stanners. Acquiring a stake in Farmside will allow Vodafone “to deliver better outcomes for rural customers, to increase our presence in the rural broadband market and to utilize the skill-sets of the two complementary companies,” he said.