ff divestment, page-7

FF selling date was up to 4/2/11. As at close of business that day, they have 841 mill shares left. They probably sold another 5 or 6 today. so Approx 835 Left.

The big question is: Will they sell them all or will they retain a core holding, and what will that amount be?

For some clues I have been looking at the FF Investment Allocation Update. They state that for the year 2011 they will be targetting Listed Equities of 34.5% of which 30% are to be Aussie listed. As at 31/12/10 the FF had approx 7.95 billion in Aussie shares excluding Telstra. Including Telstra approx 10.5bill. FF total assets are 71.76 bill.

So they are bang on their allocation excluding telstra. Does that mean they will sell them all?

Their allocation only allows for ASX200 shares, and Telstra's weighting is approx 5.12%. If they say they want no more than market weight in telstra shares, then the max they will keep will be .05 * .30 * .345 * 71.76 = $371 Mill. Or approx 130Mill shares.

My guess is they will target around 100-200 Million shares. So they have at least 5 or 6 hundred million shares left to sell. Approx 6 Months.

I would not be surprised, if the NBN is inked, that telstra announce a 1 Bill share buyback and offer to take the FF shares in one chunk. This will be funded with monies received from the NBN Co. Dividend will be maintained at 28cents. Telstra will then save approx 280 Mill each year in div payments. As well as lots of debt paid off.

They will be very well placed for a substantial share price appreciation if this were to occur. IMO