Telstra closing in on Clear

By Geoff Senescall

The Australian telecommunications giant Telstra is understood to be close to finalising a deal to buy Clear Communications.

According to market sources, a $380 million price has been offered to Clear's owner, British Telecom.

However, there was a suggestion that BT might retain a holding in Clear.

Talk of an imminent deal saw Telecom's share price fall 9c to 791c yesterday. The fear is that with Telstra behind it, Clear would become a much stronger competitor for Telecom.

While Clear has made some inroads against the market heavyweight, it has yet to gain significant scale to justify its cost base and has had a weak earnings base.

The $380 million would match the effective valuation on Clear which was paid by BT when it bought out the three other shareholders in June.

Telstra's stated aim is to seek expansion opportunities by taking strategic stakes in related companies.