Telstra unveiled details of a $750 million off-market share buyback as part of its three-year, $4.5 billion capital management program to increase the value of its stock.
The Australian telecommunications giant said it expects to return $1.5 billion to shareholders each year for the next three years through a combination of special dividends and share buy-backs.
Chief financial officer, John Stanhope, said this buyback was the next step in an ongoing capital management program which is intended to reward and benefit all shareholders.
The buyback, detailed today, will include a $1.50 cash payment and a fully franked dividend component equal to the difference between the buyback and $1.50.
The buyback is combined with plans for a 6¢ per share special dividend, which will be paid with the 2004-05 interim dividend.
Under a tender process, all eligible shareholders will be able to tender any number of their shares to Telstra at specified prices from $4.05 to $4.65.
Stanhope said this price-range was "based on our experience with last year's buyback, where the buyback price chosen by participants was well below the prevailing market price at the conclusion of the tender period.
"Shareholder response to last year's $1 billion buyback was very positive, and Telstra's sound financial settings and confidence in future performance enables us to offer all shareholders the opportunity to take part in another buyback," Stanhope said.
Stanhope said he did not know whether the federal government, which owns 51.05 percent of Telstra, would take part in the buyback.
The buyback tender period opens on October 25 and closes on November 12.