Insights

Telstra (ASX:TLS) share price leaps on $2.8 billion sale

Mobile coverage in Australia reaches some of the most remote corners of the world.
The post Telstra (ASX:TLS) share price leaps on $2.8 billion sale appeared first on The Motley Fool Australia. –

The Telstra Corp Ltd (ASX: TLS) share price is leaping higher today after the company announced a major divestment this morning. Telstra shares are currently up 4.03% to $3.75.

Below we take a look at the ASX telco’s news.

What did Telstra announce this morning?

The Telstra share price is rising after the company reported it had sold a 49% interest in Telstra InfraCo Towers to the Future Fund, Commonwealth Superannuation Corporation, and Sunsuper.

InfraCo Towers has roughly 8,200 towers across Australia, the largest provider of mobile tower infrastructure in the country.

Telstra said it expects to receive $2.8 billion after transaction costs, with completion of the acquisition expected in Q1 on the 2022 financial year (FY22). Telstra CEO, Andrew Penn, Telstra’s CEO, also revealed that the company plans to return approximately 50% of net proceeds from the sale to Telstra shareholders in FY22.

The company will retain a 51% ownership of the Towers business, including the radio access equipment and spectrum assets, to safeguard its national mobile coverage. Telstra has penned a 15-year extendable agreement with InfraCo Towers for access to existing and new towers.

Commenting on the divestment, Penn said:

Today’s announcement is a further endorsement of the [T22] strategy, as the establishment of our infrastructure assets as a separate business was designed to enable us to better realise the value of these assets, take advantage of potential monetisation opportunities and create additional value for shareholders and that is exactly what today’s announcement achieves…

Telstra’s objective in seeking a strategic partner has been to maximise overall value for our shareholders, maintain control of the assets and agree terms that secure Telstra’s mobile network leadership and competitive differentiation into the future. I am pleased that we have been able to achieve that ahead of schedule through this transaction announced today.

Penn added that the company plans to invest $75 million from the proceeds “to further enhance connectivity in regional Australia”.

After returning 50% of the net proceeds to shareholders (details to come with Telstra’s full year result release in August), the company intends to use the remainder for debt reduction to maintain a strong balance sheet.

Telstra share price snapshot

Telstra shares have gained 20% over the past 12 months, trailing the 25% gains posted by the S&P/ASX 200 Index (ASX: XJO).

Year-to-date the Telstra share price has outperformed, up 25% so far in 2021.

The post Telstra (ASX:TLS) share price leaps on $2.8 billion sale appeared first on The Motley Fool Australia.

Wondering where you should invest $1,000 right now?

When investing expert Scott Phillips has a stock tip, it can pay to listen. After all, the flagship Motley Fool Share Advisor newsletter he has run for more than eight years has provided thousands of paying members with stock picks that have doubled, tripled or even more.*

Scott just revealed what he believes could be the five best ASX stocks for investors to buy right now. These stocks are trading at near dirt-cheap prices and Scott thinks they could be great buys right now.

*Returns as of May 24th 2021

More reading

Telstra (ASX:TLS) share price tipped to jump 16% from here
5 things to watch on the ASX 200 on Wednesday

Here are 3 ASX 200 shares making market moves today

Should you buy Telstra (ASX:TLS) shares for its dividend yield?
Temple & Webster share price surges with other ASX COVID winners

The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia owns shares of and has recommended Telstra Corporation Limited. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

Trade The World Anywhere & Anytime!

Mobile app platform with over 50,000 global listed securities across 12 markets (over 70% global market capitalisation), right from your Android or iOS device.

Integrated with exclusive trading idea and investment analysis tools to help you find actionable insight on virtually every financial instrument across our 12 global markets, to help you optimise your trading strategies.

Refer Your Friends

Tell your friends about Monex and gift them FREE access to our trading tools.

We respect your privacy and will only send this one email notification to your friends. 

Share With Your Friends

Share on facebook
Share on twitter
Share on linkedin

Monex Trading Tools Access and Usage Terms

The Monex Trading Tools (referred to as ‘tools’ hereafter) are available to you inside your client portal;


To activate access to the tools, you must have a verified and approved trading account and have made a deposit of at least AUD $1000.


An active and funded account with a positive trading balance is required to continue to have access to the tools;


Although the tools are available to you indefinitely, Monex Securities may at it’s discretion disable access to the tools in the future;


Monex securities reserves the right to change these terms and conditions from time to time, as it sees fit, without notice.

Important Notice
iOS & Android App - 12 International Markets & Over 70% Global Market Cap. $0 Brokerage On US Trades. Click Here!