Small telecommunications company TeamTalk said a hostile takeover bid from sector giant Spark significantly undervalues its business and should be rejected.
Spark has offered TeamTalk shareholders 80 cents per share, calling its offer compelling and would give the small company the resources to grow.
TeamTalk has mobile radio services, Wellington's central city fibre network CityLink and a rural sector internet service.
The company's share price nearly halved in the year before the offer emerged. TeamTalk has put in a new management team and devised new plans to lift its performance.
An independent report on the takeover done by advisory firm Grant Samuel said TeamTalk is worth between $1.52 to 2.11 per share.
Grant Samuel's report has highlighted that TeamTalk's CityLink business was attractive with strong cashflows, while the radio division had a competitive advantage with investment potential.
But the report has pointed out that the Farmside business has been a poor performer since it was acquired.
The chair of TeamTalk, Roger Sowry, said the independent valuation reiterated the company's view that it was worth more.
"The Spark offer fails to reflect the value of TeamTalk's new strategy, strong leadership and forecast growth as demonstrated in our recent results announcement, nor does it attribute any value to the significant synergies and strategic benefits that Spark would capture in the unlikely event their offer were to succeed," he said.
He said the company was on track with its new turn around strategy and would reveal more about its future plans for the business units in the near future.
Shares in the company spiked after Spark's offer last month and have been trading around 80 cents.
The chief financial officer at Spark, David Chalmers, said the high valuation from Grant Samuel wasn't credible.
"The top end of the range represents a premium to the last trading price before the Spark notice of intention of 369 percent, which is patently absurd," he said.