Telecom has confirmed the sale of AAPT's under-performing retail arm to iiNet for $A60 million, subject to regulatory and iiNet shareholder approval.

Telecom estimates the transaction will have a net negative impact on AAPT’s FY11 ebitda of around $A10 million.

In turn, Telecom announced the sale of its 18.1% stake in iiNet (a retail ISP), held through AAPT's PowerTel division, "to institutional and sophisticated investors" for $A70 million.

Telecom's iiNet stake had a book value of $A81 million as of June 30, 2010.

Telecom announced to NZX this afternoon that it had sold its 10% stake in Macquarie Telecom for A$9.9m.

The carrying value of this investment was A$9.5 million at 30 June 2010. There are no changes to guidance as a result of this sale.

Start of a bigger clean out?
Telecom bought wholesale specialist PowerTel for $A357 million in 2007, folding the new acquisition into its wholly-owned Australian subsidiary AAPT.

Telecom’s third attempt to sell its underperforming Australian division, AAPT, seems to have fallen over.

The one remaining bidder, TPG, has dropped out of the race, according to media reports across the ditch this morning.

The rumour-mill has it that Telecom’s board wanted upwards of $A400 million for AAPT (that is, around 4X ebitda), while TPG would not budge from $A350 million.

Last week, it was reported that there were two serious bidders for Telecom's struggling Australian division, AAPT - acquisition-hungry, relatively cash-rich TPG, and the tiny Amcom Telecommunications.

Both had apparently been given a week to submit final bids - although the industry rumour was that both were given more time.

Today, The Sydney Morning Herald has reported that Amcom has dropped out.