Telstra bid big on detail but falls down in the execution

By PETER GRIFFIN

Are they the ravings of an eccentric economist, a sinister plan to meddle with sharemarket prices or just a bid for publicity?

No answers were forthcoming yesterday from Xiufeng Zhang, the man behind a A$60 billion ($63.8 billion) takeover bid for Telstra, Australia's biggest listed company.

Blockhouse Bay-based investment company King Win Laurel International on Monday wrote to key Telstra executives, Australian Treasurer Peter Costello and the Australian Securities and Investments Commission outlining plans to present a purchase offer to Telstra - for the entire company.

King Win is run out of a modest home in a quiet Auckland neighbourhood. A late-model BMW was in the driveway when the Herald called but there was nothing to suggest the biggest takeover bid in Australian history was being prepared.

A man claiming to be Zhang's brother-in-law and calling himself "Peter" answered the door, but said he did not know where Zhang was or what line of business King Win was in.

"I have trouble with him. We don't talk about business," he said.

Zhang, who declined to be interviewed in person or by phone, had promised to fax full details of his bid to the Herald.

He had earlier sent through a wordy economic essay about "property rights, market efficiency and the functions of government in market".

In May, a more credible takeover bid from King Win was lodged with the New Zealand Takeovers Panel for listed company Restaurant Brands, the holding company for the New Zealand operations of KFC, Pizza Hut and Starbucks.

The panel's Kerry Morrell said Zhang had to be dissuaded from continuing at the time because the bid was flawed.

"He was really serious but it was non-complying in a major way. It took some persuading for him to believe that," said Morrell.

The buzz around the failed Restaurant Brands bid may have had some knock-on effect, with the share price rising a few cents at the time.

A Telstra spokesman said the latest offer appeared to be a hoax.

The ASIC has refused to lodge it.