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Telecommunications It's on: the $8 billion Telstra sell off
Telecommunications It's on: the $8 billion Telstra sell off | It's on: the $8 billion Telstra sell off |
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| by Stuart Corner | |
| Friday, 25 August 2006 | |
  
The Future Fund is chaired by recently retired Commonwealth Bank CEO, David Murray, who has been flagged as "demanding" and someone likely to "make life miserable for the Telstra board" once the Fund becomes a shareholder. Murray was reported earlier in the week as pushing to be given the right to on-sell any of the Fund's Telstra shares as and when he chose: a freedom which, if granted would put him on a par with other Telstra shareholders, but by far the largest. The Government justified its decision to go ahead with the sale by saying: "We are proceeding with this sale because we believe that we can achieve an appropriate return for taxpayers at this time. Our sale advisers have been closely assessing market conditions and their unanimous advice to the government is that there is sufficient demand to support an offer of this magnitude and it can be done at a fair price." The sale structure, to be finalised prior to the offer launch, will include instalment receipts: retail investors will be able to pay for their shares in two instalments over 18 months but will be entitled to the full dividend that Telstra intends to declare at 28 cents for the next year. Telstra, provisionally, confirmed this dividend on Monday 20 August, but with CEO Sol Trujillo cautioning that "This assumes that the company continues to be successful in implementing its transformation strategy...and also that there are no further material adverse regulatory outcomes during the course of fiscal 2007." Telstra declined to give any dividend guidance for the 2008 financial year. Trujillo said: "The board has drawn the conclusion that we cannot give guidance on ordinary dividends for the fiscal 2008 year owing primarily to the continuing uncertainty attached to regulatory outcomes and impacts." Telstra welcomed the Government's decision saying it believed that the T3 sale was "in the best interests of Telstra's shareholders, customers and employees" and promising to "work with the Government during the sales process to help ensure its success." The announcement came just a day after Telstra's outspoken regulatory chief, Phil Burgess (a long time associate of Trujillo brought into the company by him) hit the headlines and embarrassed his employer by threatening, in answer to questions after delivering a speech, that Telstra would continue to be critical of the regulator even while the sale was in train. In the wake of the sale announcement Telstra moved swiftly to distance itself from Burgess and his loose tongue. Chairman Donald McGauchie said: "I make it plain that comments attributed to Dr Burgess in today's press suggesting an ongoing campaign during the sale process to change the regulatory regime do not represent Telstra's position." |
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