Telstra buyback proposed

UBS, the investment bank advising the federal government on options for the sale of the government’s 51 per cent shareholding, recommends that Telstra undertake “a huge share buyback”, though the size of the buyback is unknown. The finance minister, Nick Minchin, supports a buyback. The Telstra board is yet to consider the option, and whether it would be in the interest of all shareholders. The rumoured buyback would double gearing and lead to a reduction in Telstra’s credit rating.