Telstra pushing on with SouFun IPO

Telstra is going ahead with plans to list its Chinese online real estate business SouFun, and looks set to receive up to $413 million (€322 million) for its stake.
 
A consortium of two private equity firms and two existing SouFun shareholders on Friday agreed to effectively underwrite Telstra's participation in an upcoming IPO, buying any shares the company does not sell during the listing.
 
The consortium has also agreed to buy Telstra's entire stake - at a price valuing the unit at $810 million - if the IPO is not completed within “a specified period of time.”
 
Telstra owns a 51% stake in SouFun, which it bought in 2006 for $254 million.
 
But although Telstra looks set to make a healthy profit on the SouFun purchase, the sum is not as high as thought when the deal was first mooted during a healthier time for IPOs.
 
Investment bank Macquarie last December valued Telstra's stake in the unit alone at up to A$1 billion (€696 million), the Australian said. 
 
 
The paper speculated that the existing shareholders involved in the offer are SouFun founder Vincent Mo – who owns 30% of the company - and business partner Shan Li. The private equity participants are General Atlantic and Apax Partners.
 
SouFun is to be listed in Hong Kong, but may also enter the Nasdaq or another US exchange in a secondary listing.
 
Telstra's share price has taken a battering since the company on Thursday posted a 4.7% slump in FY10 profit to A$3.88 billion ($3.46b).
 
Its ASX-listed shares fell 9.5% on Thursday to A$2.94, and a further 0.68% on Friday to A$2.92. The shares were today trading 1.03% higher to A$2.95.

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