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 da
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.
