Unexpected demand for shares in Australia's giant telecommunications company Telstra nearly doubled the value of an expanded government float to A$15.5 billion (US$11.9 billion), final figures showed yesterday.
Finance Minister Nick Minchin announced that retail investors would pay a total of A$3.60 a share and institutional investors A$3.70 for 4.25 billion shares -- up from the 2.15 billion shares originally on offer.
"The level of interest from investors, both retail and institutional, was much higher than expected, making T3 the second biggest share offering in Australian history," Minchin said.
The partial float of the government's remaining 51.8 percent stake in the troubled telco is known as T3 because it is the third tranche offered after T1 in 1997 and T2 in 1999, which brought in A$16 billion.
Despite having to ditch plans to offer the entire government stake because of a plunging share price, the latest sale finally realizes Prime Minister John Howard's desire to end government ownership of the company.
The float got off to a rocky start against the background of a public row between the government and Telstra's US chief executive Sol Trujillo, who complained of restrictive regulations and interference in the running of the company.
The offer was also expected to meet resistance from the "mum and dad" investors who lost heavily after paying A$7.40 a share in the T2 sale and watching the price plunge by more than half.
But they were offered a range of sweeteners including a discount and a projected 14 percent yield to next June, and snapped up the lion's share of the stock on offer.
Minchin said 95 percent of the retail applications would be satisfied, with small investors taking 60 percent of the shares, domestic institutions 28 percent and international institutions 12 percent.
"In order to satisfy the much higher than expected entitlement demand from existing shareholders, the base offer size has been increased, in accordance with the prospectus, to 3.69 billion shares," Minchin said.
"In addition, as set out in the prospectus, a further 554 million shares were made available to satisfy other demand in the institutional offer, bringing the total institutional offer size to 1.7 billion shares," he said.
Minchin said the remainder of the government's stake, 17 percent, would be placed in the Future Fund, established to cover public service pension payments, where it will be held for at least two years.
The final investment price of A$3.60 for retail investors was determined after an institutional bookbuild which priced a second instalment for the shares at A$1.60 each.
The securities will begin trading as instalment receipts on the Australian Stock Exchange today.
Telstra shares closed at A$3.75 on the Australian Stock Exchange on Friday.
Terry Campbell, chairman of Goldman Sachs JBWere, one of three investment banks that managed the T3 sale, said he expects Telstra shares to trade at a slight discount today.
And Argo Investments managing director Rob Patterson said that demand for Telstra shares might be close to exhausted by the expanded float.
NO-LIMITS PARTNERSHIP: ‘The bottom line’ is that if the US were to have a conflict with China or Russia it would likely open up a second front with the other, a US senator said Beijing and Moscow could cooperate in a conflict over Taiwan, the top US intelligence chief told the US Senate this week. “We see China and Russia, for the first time, exercising together in relation to Taiwan and recognizing that this is a place where China definitely wants Russia to be working with them, and we see no reason why they wouldn’t,” US Director of National Intelligence Avril Haines told a US Senate Committee on Armed Services hearing on Thursday. US Senator Mike Rounds asked Haines about such a potential scenario. He also asked US Defense Intelligence Agency Director Lieutenant General Jeffrey Kruse
INSPIRING: Taiwan has been a model in the Asia-Pacific region with its democratic transition, free and fair elections and open society, the vice president-elect said Taiwan can play a leadership role in the Asia-Pacific region, vice president-elect Hsiao Bi-khim (蕭美琴) told a forum in Taipei yesterday, highlighting the nation’s resilience in the face of geopolitical challenges. “Not only can Taiwan help, but Taiwan can lead ... not only can Taiwan play a leadership role, but Taiwan’s leadership is important to the world,” Hsiao told the annual forum hosted by the Center for Asia-Pacific Resilience and Innovation think tank. Hsiao thanked Taiwan’s international friends for their long-term support, citing the example of US President Joe Biden last month signing into law a bill to provide aid to Taiwan,
China’s intrusive and territorial claims in the Indo-Pacific region are “illegal, coercive, aggressive and deceptive,” new US Indo-Pacific Commander Admiral Samuel Paparo said on Friday, adding that he would continue working with allies and partners to keep the area free and open. Paparo made the remarks at a change-of-command ceremony at Joint Base Pearl Harbor-Hickam in Hawaii, where he took over the command from Admiral John Aquilino. “Our world faces a complex problem set in the troubling actions of the People’s Republic of China [PRC] and its rapid buildup of forces. We must be ready to answer the PRC’s increasingly intrusive and
STATE OF THE NATION: The legislature should invite the president to deliver an address every year, the TPP said, adding that Lai should also have to answer legislators’ questions The Chinese Nationalist Party (KMT) yesterday proposed inviting president-elect William Lai (賴清德) to make a historic first state of the nation address at the legislature following his inauguration on May 20. Lai is expected to face many domestic and international challenges, and should clarify his intended policies with the public’s representatives, KMT caucus secretary-general Hung Meng-kai (洪孟楷) said when making the proposal at a meeting of the legislature’s Procedure Committee. The committee voted to add the item to the agenda for Friday, along with another similar proposal put forward by the Taiwan People’s Party (TPP). The invitation is in line with Article 15-2