REG - Telstra Corp. Ld - Telstra to sell 47.7 per cent stake in Autohome <Origin Href="QuoteRef">TLS.AX</Origin>

TelstraAnnouncement

15/04/2016 10:30

RNS Number : 3431V
Telstra Corporation Ld
15 April 2016
15 April 2016
The Manager
RNS
Telstra Corporation Limited
Office of the Company Secretary
Level 41
242 Exhibition Street
MELBOURNE VIC 3000
AUSTRALIA
General Enquiries 61 8 8308 1721
Facsimile 61 3 9632 3215
Email:
companysecretary@team.telstra.com
ELECTRONIC LODGEMENT
Dear Sir or Madam
Telstra to sell 47.7 per cent stake in Autohome
In accordance with the Listing Rules, I attach a market release, for release to the market.
Yours faithfully
Damien Coleman
Company Secretary




MARKET RELEASE
Telstra to sell 47.7 per cent stake in Autohome
15 April 2016 - Telstra today announced it had entered into an agreement with Ping An Insurance Group for the sale of 47.7 per cent of total issued shares in Chinese online business Autohome for US$1.6 billion (A$2.1 billion1). Telstra will retain a 6.5 per cent interest in Autohome after completing the transaction. 
The sale price of US$29.55 per share reflects a premium of 12.7 per cent to Autohome's volume weighted average price over the past 60 days. 
Telstra CEO, Andrew Penn, said Telstra was proud of its role in Autohome's rapid growth since 2008 and it was the right time to realise significant value for Telstra shareholders. 
"As one of the largest financial services companies in Asia with a nationwide presence and customer base in China, Ping An will be a strong partner for Autohome," Mr Penn said. 
"For the next phase of the company's development, as Autohome moves away from being purely online to operating an offline sales platform in China, it will benefit from a strategic investor in Ping An which has expertise in car insurance and financing. 
"Autohome has played an important role in building our presence in the Chinese technology sector and we look forward to working with Ping An and Autohome management as a minority investor in the next stage of the company's evolution."
Telstra expects to book an accounting gain on completion of the sale of approximately A$1.8 billion in the second half of FY16, the final amount being subject to a number of adjustments, including foreign exchange rates and the value of its retained interest. Completion is subject to any required Chinese regulatory approvals and Autohome Board approval.
"Autohome has been an excellent investment for Telstra and demonstrates the opportunities that exist in the Asia-Pacific region. Asia remains one of the key elements of our growth strategy. We continue to grow our enterprise services businesses in the region with strong consolidation opportunities in our Pacnet business, joint venture in Indonesia and the exploration of future growth opportunities," Mr Penn said.
"In terms of proceeds from the sale, we remain committed to our capital management strategy. We will take a balanced approach in considering the use of these funds, which includes potential capital management options."
Note - The percentage figures of Autohome shares used in this announcement take into account shares that Autohome has reserved but not granted, pursuant to Autohome employee equity compensation plans.
1 Based on current foreign exchange rates
Media contact: Jason Laird, +61 (0) 488126823
Email: media@team.telstra.com
Investor contact: Peter Kopanidis, +61 (0) 412171673
Email:investor.relations@team.telstra.com
Ref number: 051/2016
About Telstra 
Telstra is a leading telecommunications and technology company offering a wide range of services globally, with a focus on the Asia-Pacific region. We offer a full range of services and compete in all telecommunications markets in Australia, including operating the country's largest mobile and Wi-Fi networks. Telstra has operated globally for more than 70 years and today we own and operate one of the largest subsea cable networks in the Asia-Pacific. We provide end-to-end solutions including managed network services, global connectivity, cloud, voice, co-location and satellite solutions. 
Disclaimer:
This announcement does not constitute an offer to sell, or a solicitation of an offer to buy, any securities in the United States. Additionally, any securities mentioned herein have not been, and will not be, registered under the U.S. Securities Act of 1933, as amended (the "U.S. Securities Act") or the law of any state of the United States, and may not be offered, sold or resold, directly or indirectly, in the United States except pursuant to an exemption from, or in a transaction not subject to, the registration requirements of the U.S. Securities Act and applicable U.S. state securities laws. 
This announcement contains statements that may constitute "forward-looking" statements pursuant to the "safe harbor" provisions of the U.S. Private Securities Litigation Reform Act of 1995. These forward-looking statements can be identified by terminology such as "will", "expects", "anticipates", "future", "intends", "plans", "believes", "estimates" and similar statements. Statements that are not historical facts, including statements about Telstra's beliefs and expectations, are forward-looking statements. Forward-looking statements involve inherent risks and uncertainties. Such forward-looking statements are based on numerous assumptions regarding the present and future business strategies of Telstra. All information provided in this announcement is as of the date of this announcement, and Telstra does not undertake any obligation to update any forward-looking statement, except as required under applicable law.

This information is provided by RNS
The company news service from the London Stock Exchange
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