Telstra offers second big buy-back

SYDNEY - Telstra is to undertake a A$750 million ($810 million) off-market share buy-back as part of its capital management programme.

Telstra expects to return A$1.5 billion to shareholders each year for the next three years, through special dividends and/or share buy-backs, subject to maintaining board-approved target financial parameters.

This buy-back, combined with a 6c a share special dividend Telstra intends to pay with the interim dividend in fiscal 2005, is part of the company's ongoing capital management programme.

Telstra's chief financial officer, John Stanhope, said the buy-back was the next step in a continuing capital management programme which is intended to reward and benefit all shareholders, whether or not they elect to participate.

Shareholders who choose to participate in the buy-back will get a return of capital and a fully franked dividend, Telstra said.

Those who do not can expect to see enhancement in the company's key ratios including earnings per share and return on equity.

"Shareholder response to last year's A$1 billion buy-back 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 buy-back," Stanhope said.

All shareholders will be able to tender any number of their shares to Telstra within the specified price range of A$4.05 to A$4.65.

- AAP