Telstra preps $850m SouFun IPO

Dylan Bushell-Embling
06 Sep 2010
Daily News

Australia's Telstra has commenced an IPO of Chinese online real-estate property SouFun, setting a price range valuing the unit at up to $850 million.

The company on Friday filed a registration statement with the US Securities and Exchange Commission (SEC) for an IPO of American depository shares.

The statement sets an indicative price range of $40.50-$42.50 per share, valuing SouFun at between $810 million and $850 million.

Telstra, which bought 50.5% of SouFun in 2006 for $254 million, intends to sell its entire holding. The listing is expected to be complete by September 30.

The operator has already secured underwriters to buy up any of Telstra's stake not purchased during the listing.

The move to exit SouFun has led to uncertainty about Telstra's future plans for China, The Australian said. SouFun had contributed to around half of Telstra's revenue from China, but the company still owns around $300 million worth of other Chinese assets.

Management of Telstra's remaining Chinese web properties have been transferred to Telstra International in Hong Kong.

Telstra has warned that any gain on the sale of SouFun will be impacted by forex movements since its acquisition. The price range is also lower than expected when proposed last December - investment bank Macquarie had at the time valued Telstra's stake in SouFun alone at up to A$1 billion ($916.6m).


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