Outperform market, page-60

Wilsons R. Crookston 19.4.23 said that a possible 49% sale of TLS InfraCo could deliver $12.6b to TLS- & TLS might then pay shareholders a Special Dividend of 109c per share!
Also said "On the other hand, TLS could use the capital raised to buyback shares which would be highly accretive to both EPS and DPS and therefore could trigger upgrades to consensus forecasts".

https://www.livewiremarkets.com/wires/unbundling-telstra-s-hidden-value

He said

"Asset sale could trigger share re-rate and fund significant capital management

Our sum of the parts analysis suggests that TLS’s assets should be valued on combined EV/EBITDA multiple of ~9.1x, which represents a meaningful premium to its current implied market multiple of ~7.4x for FY24.

We think management’s efforts to ‘monetise’ InfraCo, if successful, could be a key catalyst for a re-rate of TLS’s valuation multiple as its underlying infrastructure is valued more fairly by the market.

We think TLS will follow a similar structure to the Amplitel deal (i.e. the sale of a minority stake) with InfraCo, which would likely fund sizeable capital management initiatives such as large special dividends or share buybacks, noting the significant size of InfraCo relative to TLS’s overall market value (i.e. at >40% of TLS’s current enterprise value).

Alternatively, TLS may opt to spin-off InfraCo into a separately listed entity, similar to Spark New Zealand’s (SPK) demerger of Chorus (CNU) in 2014.

As figure 8 illustrates, we estimate that a 49% sale of InfraCo could raise ~$12.6bn (ignoring taxes and transaction costs for simplicity) which could be used to fund large capital management initiatives. The potential capital raised could translate to a hypothetical special dividend of 109 cps (my emphasis) representing a ~25% special dividend yield on the current TLS share price. On the other hand, TLS could use the capital raised to buyback shares which would be highly accretive to both EPS and DPS and therefore could trigger upgrades to consensus forecasts.

Figure 8: InfraCo: hypothetical special dividend under a 49% sale scenario*"