t3 game over heheheheh

http://www.theaustralian.news.com.au/common/story_page/0,5744,17355314%255E643,00.html


T3 doubt as Telstra tumbles
Michael Sainsbury and Robert Clow
November 25, 2005

TELSTRA shares yesterday tumbled to their lowest point since the day the lumbering telco floated on the share market in 1997, casting further doubt over the Government's ability to offload its majority stake just as it named three investment banks to manage the sale.

The shares touched a low of $3.89 before closing at $3.90, down 11 cents or 2.7 per cent. They are just 50c higher than when investors bought the first tranche of government shares eight years ago, valuing its remaining 51.8 per cent stake at about $24 billion.

Goldman Sachs JB Were and ABN AMRO will scoop $12.4 million in project management fees as global co-ordinators for the planned sale, along with UBS, the co-author of the scoping study into the Telstra sale released at the end of June. They will also split commissions of slightly less than 1 per cent of the value of the shares sold. UBS had been considered a firm favourite for a global co-ordinator role, while Goldman Sachs JB Were could claim not only a very strong retail network in Australia, but also a powerful international institutional network.

Dutch-owned ABN AMRO, however, was a dark horse in the process. The investment bank counts local retail house Morgans as a partner, while it can also point to European privatisation and telco experience.

The choice of three strong retail houses suggests that the Government intends to lean heavily on Australian "mums and dads" in the upcoming deal.






The biggest surprise was the omission of local investment powerhouse Macquarie Bank from a list that was once mooted to have included four banks. Macquarie may have burnt its bridges over a leak of information from a tender for a $300 million project with the Department of Defence two weeks ago.

Sources close to Macquarie said that they had no indication from the Department of Finance that the the bank's problems with the Department of Defence had affected the deal.

The bank may console itself with the knowledge that the federal Government has yet to commit to a sale, and a sale now is likely to be a far smaller deal than originally contemplated. Based on yesterday's record low, the offer would be unlikely to fetch much more than the $3.40 per share at Telstra's initial public offering eight years ago.

Shareholders who bought shares in the 1999 T2 sale have now seen $3.50 wiped off their investment, while more than $14 billion has been wiped off Telstra's market value since Sol Trujillo took over as chief executive on July 1.

The Telstra share price is now well short of the $5.25 that remains in the forward estimates of the Government's budget papers. Morgan Stanley analyst Andrew Hines this week dropped his target price to $3.51.

Sources close to the sale process said the Government was now seriously considering a partial sale, which will include a retail offer, with the roaming shares to be put into the Future Fund.

Finance Minister Nick Minchin told The Australian: "Price would be one of the factors we consider when we decide whether to proceed with the sale." He will make a recommendation to cabinet in late February or early March. But the newly appointed banks will not wait for that decision. They will make a recommendation to the Government on whether a sale should proceed based on factors such as demand.