Telstra is in discussions to sell its Sensis directories business for as much as $3 billion as the telecommunications giant sheds the last vestiges of its traditional media operations in favour of technology services and bundled telephony packages with pay television operator Foxtel, reports The Australian Financial Review.
It is understood Telstra is in advanced negotiations with a United States private equity firm over the sale of Sensis, which publishes a range of print and online directories including the White Pages, Yellow Pages and The Trading Post. Sources said the deal could be completed as soon as next week.
A Sensis sale would mark the first time the Yellow and White pages were produced by a foreign company. Telstra is legally obliged to produce and distribute printed copies of the White Pages but not the Yellow Pages.
Sensis earnings have declined over the past decade as readers and advertisers move to online rivals such as Google. Under previous chief executives Ziggy Switkowski and Sol Trujillo the telco giant rejected plans to sell or float the business, which was valued at up to $12 billion in 2005.
However, it is believed current boss David Thodey, who is back at work this week, is prepared to offload the business, believing it will struggle to grow in an increasingly digital media landscape. AFR Weekend understands Goldman Sach is advising Telstra on the deal, while Gresham has been brought on to advise the US party.
Telstra media strategy has changed focus to concentrate less on traditional directories and more on selling bundled services that include Pay TV and sports packages to keep high value customers willing to pay a premium loyal to its brand. Telstra owns 50 per cent of Foxtel with Rupert Murdoch’s News Corporation holding the other half.
The sale of Sensis would assist Mr Thodey to accumulate a significant war chest of $9 billion. In December it sold its Hong Kong mobile service provider, CSL, for $US2.42 billion. Weeks earlier Telstra listed Chinese internet company Autohome on the New York Stock Exchange in a move that valued its stake at $US1.9 billion. Telstra is negotiations with the Abbott government over its $11.2 billion deal to sell critical infrastructure – ducts, pipes and copper network – for the national broadband network.
Source: AFR