Telstra looking to acquire Digicel

Australian taxpayers are likely to pay an inflated price as part of the government’s deal to subsidise a Telstra acquisition of Digicel Pacific rumoured to be to the tune of $60 million. Digicel Pacific is a critical political piece of infrastructure so the price paid for the business with be substantially more than it’s worth.
The Australian government is looking for Digicel Pacific to come into Australian hands as there would be a high risk that China would attempt to take ownership of the business and increase it’s influence in the region.
Digicel Pacific is a subsidiary of Digicel Group, an international provider of mobile services. Digicel Pacific covers Fiji, Nauru, PNG, Samoa, Vanuatu and Tonga.
Last week, Telstra confirmed to the stock exchange that the Australian Government had meetings with them to discuss the prospect of acquiring Digicel. Telstra is not overly keen on acquiring the business and has stipulated that if it were to purchase Digicel Pacific, it would need to be mostly subsidised by the government and they would also need to take on part of the risk.
Talks with Digicel Pacific are progressing but have not reached a deal as yet. Testra’s lack of interest in the project is reflected in it’s strong requirement for government backing. It will also not proceed with any deal that would not be beneficial for it’s shareholders.
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