Telecom has today reiterated its commitment to AAPT after Hong Kong-based Pacnet confirmed its interest in the struggling Australian subsidiary.

When rumours of a $US420 million offer first surfaced last week, both company's were coy.

But now Pacnet chief executive Bill Barney has told the Sydney Morning Herald:
"AAPT is an interesting asset to us … it does fit very well with our strategy so we would look at it".

Mr Barney also said the privately-held Pacnet had access to $1 billion for investments.

Hong Kong-based Pacnet has confirmed its interest in buying Telecom NZ's underperforming Australian subsidiary, AAPT.

When rumours of a $US420 million offer first surfaced last week, both company's were coy.

But now Pacnet chief executive Bill Barney has told the Sydney Morning Herald:
"AAPT is an interesting asset to us … it does fit very well with our strategy so we would look at it".

Veteran Australian telco analyst Paul Budde saysTelecom should sell AAPT to Pacnet, or another party, and do it soon.

"Let's get on and do it. The longer they wait, the lower the price," says the Sydney-based Paul Budde Communications lead, in Wellington today as a guest of Tuanz (the Telecommunications Users Association of New Zealand) for its "State of the Industry" conference.

Telecom's American depositary shares were up 8.6% today in midday trading on the New York Stock Exchange to $US6.32.

With US investors apparently buying into rumours that Pacnet will buy Telecom's struggling AAPT division for $US420 million – a 40% premium on the Australian division's book value – Telecom's depositary shares were up on heavy volume. With half the NYSE trading day to go, its shares had already passed its average daily volume of 314,717 shares traded.

Telecom's NYSE rise was ahead of a positive market. At midday, the Dow was up 2.89%

Asian telco giant Pacnet is offering $US420 million (about NZ$795 million) for Telecom's Australian business AAPT, Reuters reports.

A source told Reuters that Pacnet, which was formed earlier this year from the merger of Asia Netcom and Pacific Internet, would fund its offer with cash and equity.

AAPT has been a thorn in Telecom’s side since it paid top dollar for
the telco in 1999. Last year Telecom paid $A357 million to acquire another Australian telco, PowerTel, to give AAPT a bigger reach and more customers.