Graeme Hart interest in Telstra raid

Is NBR Rich Lister Graeme Hart considering his biggest ever raid?

The AFR has reported this morning that Mr Hart “had a look” at Telstra before his $US4.4 billion deal to buy US rubbish bag maker Pacitv (which turned into his biggest deal to date).

On the face of it, there are major barriers to New Zealand’s richest man making a play for Australia’s largest phone company, which has a market cap of $A33 billion.

Foreign ownership is restricted to 15%, for starters (though ironically, Telstra has an ex-pat Kiwi chief executive, Wellingtonian David Thodey - brother of ex-BNZ chief executive Peter Thodey).

But the AFR’s theory is that Mr Hart – or another private equity player – could buy out the Australian government’s remaining 10% stake in Telstra (held by its Future Fund) at a 30% premium or $A3.40 a share.

That would push Telstra’s market cap to $A42.3 billion, with roughly $A14 billion in debt. According to the AFR’s sums, with 8% cost of funding, there could still be a decent return if the dividend is trimmed, and the new owner tapped Telstra’s $A3.8 billion free cash flow.

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5 Comments & Questions

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Graeme hart= the best businessman in NZ in history!! Lets hope he gives his wealth to chairty like gates/buffet when he's old.

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Not sure about best businessman.... any monkey can borrow money and buy a business.

He could earn the title in 20 years if he manages to pay it all back.

But he could also quite easily become another Terry Seriposes (however you spell his name).

I would agree that Hart has steel balls though.

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Funny that in the midst of thinking about rubbish bags he was of the mind set to look at Telstra. I guess he must have looked at Telecom NZ as well !

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Yellow Pages - that looks to be pretty well priced at the moment compared to it's last sale price.

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Doubt the banksters would let him walk with that asset for $450M...still, it will be less in a years time.

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