The Australian government plans to sell a larger stake in fixed line incumbent Telstra than originally planned to meet demand from institutional investors, Finance Minister Nick Minchin told parliament. The state launched the AUD8 billion (USD6.1 billion) sale of 2.2 billion Telstra shares last month, offering half of the stake to the financial community. The remainder is being sold to retail and institutional investors. Individuals have until 4pm Sydney time today to apply for shares, whilst a two-day offer for institutional investors will open 15 November. ‘We expect that by the end of today we will have already exceeded our AUD8 billion target,’ Minchin told parliament in Canberra. ‘The government will increase the size of the offer to meet the demand from institutional shareholders.’
The high level of interest has been a pleasant surprise for the government, after numerous failed attempts to get a decent price for its remaining shares in Australia’s biggest telco. Shortly after the release of a disappointing set of fiscal full year 2006 results in August 2006, Prime Minister John Howard announced that the state would sell just a third of its remaining 51.8% in Telstra, opting not to offer its entire stake because its share price of AUD3.50 was at a nine-year low.