Telstra sells towers stake for $2.8b to return half the money to shareholders

Telstra has sold 49 per cent of its tower business to a consortium of superannuation funds for $2.8 billion and said it would pay out half of that sum to shareholders.

The telco giant announced on Wednesday morning it has agreed to sell the stake in InfraCo Towers to Future Fund, Commonwealth Superannuation Corporation and Sunsuper (managed by Morrison & Co), who would become strategic partners in the business. The deal values the business, which is the largest mobile infrastructure provider in the country with about 8200 towers, at $5.9 billion.

Telstra has entered a 15 year agreement with InfraCo Towers to secure ongoing access to its existing and new tower assets.Credit:Rob Homer

The telco giant said $75 million made from the sale will be spent on improving connections in regional Australia. The deal is expected to be finalised by the end of September, with the capital returned to shareholders in the same period.

“Today’s announcement is a further endorsement of the [T22] strategy as the establishment of our infrastructure assets as a separate business was designed to enable us to better realise the value of these assets, take advantage of potential monetisation opportunities and create additional value for shareholders and that is exactly what today’s announcement achieves,” Telstra chief executive Andy Penn said in the statement.

Mr Penn announced a legal restructure of Telstra early this year, which included the split of InfraCo Towers from InfraCo Fixed. ServeCo houses product and services while a fourth division for the international arm is also being established.

Mr Penn said Telstra is retaining majority ownership and will continue to own parts of the network including radio access equipment and spectrum. The telco has entered a 15 year agreements with InfraCo Towers to secure ongoing access to existing and new infrastructure.

Dr Raphael Arndt, chief executive of the Future Fund, said the investment added to its local infrastructure portfolio.

“This investment further strengthens the Future Fund’s exposure to digital infrastructure and the long- term thematic of data growth,” Dr Arndt said.

Marko Bogoievski, chief executive of Morrison & Co also welcomed the strategic partnership with Telstra.

InfraCo Towers will operate under a board led by InfraCo chief executive Brendon Riley. The chief executive of the towers business will be Jon Lipton.

Telstra shares closed at $3.60 on Tuesday.

More to come.

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