Wellington, Oct. 10 (Reuters): Australian Internet company iiNet Ltd has sold its New Zealand operations, ihug, to mobile phone giant Vodafone for NZ$41 million ($27 million).

ihug, New Zealand's third biggest Internet service provider, was put up for sale in July after iiNet said it had received a large number of approaches to buy the company.

It said the sale price would leave it with a gain of A$6 million above book value. It bought ihug in 2003 for NZ$81 million.

“We’re pleased that a fair price has been made by Vodafone, delivering a good clean result for iiNet shareholders,” chief executive Michael Malone said in a statement.

Shares in iiNet closed on Monday at A$0.83.

Vodafone is New Zealand's biggest mobile phone company with around 53 per cent market share, but has only limited presence in other areas of the telecommunications sector.