Telstra (TLS) having announced the acquisition of The Trading Post Group, through its subsidiary, Sensis. While there are some questions surrounding the $636m price tag, there is strategic sense in combining Trading Post with the Sensis directory businesses. Other comments made by TLS management suggest that there are no more acquisitions in the pipeline this year, and that there may in fact be planned capital management initiatives (increased dividend and/or buyback).
The estimated synergies generated by the transaction are +$11m to pre-tax earnings in 2005. TLS management stated that the transaction will be earnings per share (eps) accretive in the second year, and cashflow positive in year one. Ultimately TLS has bought a quality asset with bona fide growth and obvious synergies.
Management comments that it will be within its financial parameters at year end suggests no further transactions are likely in the near term and the prospect of capital management initiatives (increased dividends and/or buyback) increase accordingly. Macquarie Research Equities (MRE) believe that this should provide support for the stock around current levels.
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TLS Looked supported today at $4.70 and closed $4.74 - Don't forget we have a 13c dividend coming up, and once the media stop bashing TLS it should move closer to $4.85 - $4.90 before it goes ex-dividend on the 22/03/04
Telstra (TLS) having announced the acquisition of The Trading...
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Last
$3.94 |
Change
0.030(0.77%) |
Mkt cap ! $45.46B | |||
| Open | High | Low | Value | Volume |
| $3.90 | $3.95 | $3.90 | $77.32M | 19.65M |
Buyers (Bids)
| No. | Vol. | Price($) |
|---|---|---|
| 10 | 502645 | $3.93 |
Sellers (Offers)
| Price($) | Vol. | No. |
|---|---|---|
| $3.94 | 234589 | 4 |
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| Last trade - 16.10pm 19/11/2024 (20 minute delay) ? |
| TLS (ASX) Chart |