Is Telstra a takeover Target and/or Cheap?, page-3

Is splitting the company in two makes it a takeover target?

Splitting the company in two

The most radical, yet perhaps obvious idea tabled by Mr Penn was the split.
While it means next to nothing for Telstra's customers, it could yet be the plan that pulls the company out of a steady march downhill.
The so-called InfraCo will be a substantial business in itself — $11 billion in assets, sales of $5.5 billion and pre-tax earnings of around $3 billion.
On JP Morgan numbers it could boost shareholder value by up to 50 per cent, but not for some time.
It will sit inside Telstra, albeit as a separate company, at least until the NBN roll-out is completed in 2022.
After that, it might be spun out, it might seek a co-investor and in time it might be well positioned to have a crack at buying a privatised NBN.
It is also a development that would more than tweak the Federal Government's interest.
It would love to get rid of the $74 billion broadband ballast it has weighing down its political fortunes and deliver an outcome that should have been delivered at the outset of the NBN.
So while workers and investors may be ruing Telstra's "big-bang" announcement, the likely legacy of Mr Penn's plan is not likely to be known for years, well after he has left the company.

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http://www.abc.net.au/news/2018-06-20/telstras-big-bang-splits-in-two-as-jobs-and-plans-go/9889436

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