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 HUMAN ERROR: After the incident, the Coast Guard Administration said it would obtain uncrewed aerial vehicles and vessels to boost its detection capacity Authorities would improve border control to prevent unlawful entry into Taiwan’s waters and safeguard national security, the Mainland Affairs Council (MAC) said yesterday after a Chinese man reached the nation’s coast on an inflatable boat, saying he “defected to freedom.” The man was found on a rubber boat when he was about to set foot on Taiwan at the estuary of Houkeng River (後坑溪) near Taiping Borough (太平) in New Taipei City’s Linkou District (林口), authorities said. The Coast Guard Administration’s (CGA) northern branch said it received a report at 6:30am yesterday morning from the New Taipei City Fire Department about a
IN BEIJING’S FAVOR: A China Coast Guard spokesperson said that the Chinese maritime police would continue to carry out law enforcement activities in waters it claims The Philippines withdrew its coast guard vessel from a South China Sea shoal that has recently been at the center of tensions with Beijing. BRP Teresa Magbanua “was compelled to return to port” from Sabina Shoal (Xianbin Shoal, 仙濱暗沙) due to bad weather, depleted supplies and the need to evacuate personnel requiring medical care, the Philippine Coast Guard (PCG) spokesman Jay Tarriela said yesterday in a post on X. The Philippine vessel “will be in tiptop shape to resume her mission” after it has been resupplied and repaired, Philippine Executive Secretary Lucas Bersamin, who heads the nation’s maritime council, said
REGIONAL STABILITY: Taipei thanked the Biden administration for authorizing its 16th sale of military goods and services to uphold Taiwan’s defense and safety The US Department of State has approved the sale of US$228 million of military goods and services to Taiwan, the US Department of Defense said on Monday. The state department “made a determination approving a possible Foreign Military Sale” to the Taipei Economic and Cultural Representative Office in the US for “return, repair and reshipment of spare parts and related equipment,” the defense department’s Defense Security Cooperation Agency said in a news release. Taiwan had requested the purchase of items and services which include the “return, repair and reshipment of classified and unclassified spare parts for aircraft and related equipment; US Government
More than 500 people on Saturday marched in New York in support of Taiwan’s entry to the UN, significantly more people than previous years. The march, coinciding with the ongoing 79th session of the UN General Assembly, comes close on the heels of growing international discourse regarding the meaning of UN Resolution 2758. Resolution 2758, adopted by the UN General Assembly in 1971, recognizes the People’s Republic of China (PRC) as the “only lawful representative of China.” It resulted in the Republic of China (ROC) losing its seat at the UN to the PRC. Taiwan has since been excluded from
RSS