Telstra offloads its NZ operations for $670m
TELSTRA'S $670 million sale of its New Zealand operations to Vodafone New Zealand is just a taste of the sweet fortunes still to come, an analyst says.
TELSTRA'S $670 million sale of its New Zealand operations to Vodafone New Zealand is just a taste of the sweet fortunes still to come, an analyst says.The telco's shares yesterday rose to their highest since December 2008 after it said it would sell TelstraClear including its voice and data-based services, network infrastructure and New Zealand customer base.Chief executive officer David Thodey said: "The deal is a natural one, bringing together TelstraClear's fixed telecommunications and data products and corporate client-base with Vodafone New Zealand's mobile offering and retail customer base." Telstra shares closed 1? lower at $3.85, ending five straight days of gains. The stock is up almost 17 per cent this year compared with about 1 per cent for the overall market.Wealth Within investment analyst Janine Cox said the company's share price had been rising over the past four months, and was expected to peak at $4.20 a share in the next few."It's [due to] the fact that it was already in a nice uptrend, which is a good selling story for the brokers," Ms Cox said. "The fact that this news has come out and that there's a dividend coming up just bodes well for Telstra."Telstra said it would return about $NZ490 million ($A380 million) in cash from the sale to the company using a special dividend. The company said it would book a separate charge for foreign exchange losses for the last financial year and the current one.Ms Cox said that the telco's share price took a beating last year on investor uncertainty over plans for the national broadband network. But she said Telstra's structural split of its fixed wholesale and retail arms in February had helped the company "turn a corner" and become a more attractive investment."It's like investors are saying, 'Finally things are looking better for Telstra'. Compared to what are seen as more risky assets, which are energy, materials and industrials, this would be more of a safe haven and so it's easier for people to be prepared to put their money into it."But she warned the upward trend might not last too long, with money possibly moving back into resource stocks after the reporting season.Telecoms analyst Mark McDonnell of BBY said the sale of Telstra's New Zealand arm was "long overdue". Its dabble on the other side of the Tasman had been misguided. While customers such as Westpac had been happy to use Telstra for their Australian businesses because it had had control of its network before the advent of the NBN, they often preferred to use its Kiwi equivalent Telecom in New Zealand.