takeover speculation - cdr, tls and optus, page-4

takeover speculation - cdr, tls and optus Citigroup's analysis 26/9/05.

- Commander is our second preference
because it is emerging as a solid takeover candidate
- Optus could afford to pay $3.10 per CDR share in a takeover scenario
- Longer term this trend will ultimately lead to industry consolidation, which will be positive for Telstra & Optus. However in the mean time
there could be some pain (potentially for second tier DSL operators).
- TEL NZ remains our top pick in the sector because it is immune from
some of these risks. CDR is also emerging as an attractive takeover play. However we believe there is earnings risk for Telstra and Singtel/Optus in the short term.