Telstra sale 'beauty parade' set to begin

SYDNEY - Investment bank chiefs from around the globe are expected to fly to Australia in the next two weeks to make a final pitch for the prized role of selling the Government's A$28 billion ($30.85 billion) stake in Telstra.

Up to 10 banks lodged bids last week for a global advisory role to manage the sale of the Australian Government's 51.8 per cent stake in the country's top phone company, and each is expected to be invited to participate in a "beauty parade" to sell their strategy.

At least two Finance Department officials and two independent advisers are expected to sit on the panel for a selection process that will be held in either Canberra or Sydney and is expected to take at least two days.

"Banks are yet to be invited to the beauty parade but it will take place in the near future," said Ian Smith, chief executive of Gavin Anderson & Company, communications adviser for the Telstra sale.

Parliament approved the sale of the Government's stake last month, but regulatory uncertainty, a profit downgrade and disgruntled investors who lost money in an earlier sale mean the job of privatising the phone company is likely to be a tough one.

Swiss bank UBS is widely tipped as a frontrunner for a joint global coordinator role, of which banking sources expect there will be up to four.

UBS' credentials have been boosted by conducting a so-called "scoping study" for the Government earlier this year to evaluate sale options for Telstra and its No 2 ranking in Australian equity league tables according to the latest Thomson Financial data.

Macquarie Bank, Australia's largest investment bank and No 1 in the league tables, and Goldman Sachs JBWere, which won a similar role in previous Telstra sales, are also considered strong contenders.

On Wednesday Deutsche Bank agreed to buy a 19.9 per cent stake in Australia's Wilson HTM Investment Group in a move it said would strengthen its chances of winning a role in the Telstra sale.

The banks chosen for the role are expected to be revealed mid-November.

- REUTERS