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Optus says 'yes' to float

Optus says 'yes' to float

As expected, Cable & Wireless Optus (C&W Optus) this week announced its intention to list on the Australian Stock Exchange in mid-November.

The public offering was prompted when Mayne Nickless, which owns 25 per cent of the company, decided to purge its C&W Optus shares. Mayne Nickless managing director Bob Dalziel issued that edict 26 months ago, when he returned the company's focus to its traditional strongholds of logistics and healthcare.

"We aren't bankers," Dalziel said. "We are here to add value to our shareholders and investors."

Chris Anderson, C&W Optus' chief executive, said a total of 1026.9 million shares would be offered for sale under the offer. C&W Optus will issue 375 million shares, while Mayne Nickless will sell the remainder, with some rebalancing by institutional shareholders, including AMP and National Mutual, he said.

Concurrent with the share offer, Cable and Wireless will purchase an additional 472.6 million shares and exercise 332.9 options, taking its stake in C&W Optus to almost 53 per cent. This deal has received full approval and will be worth about $1.45 billion.

The share offer will provide C&W Optus with new equity funding of about $2.5 billion.

The prospectus outlines the four components of the offer: a non-renounceable entitlement offer for Mayne Nickless shareholders; an Optus employee offer; a broker firm retail offer; and a global institutional offer.

The application, and maximum price, for the retail and entitlement offer will be $1.85 per share, Anderson said.

"We were conscious to set the price at an attractive level," he said.

The final price payable will be determined following an institutional process, open to local and international institutions, as well as certain members of the ASX.

C&W Optus' forecast for 1999 is for 16 per cent revenue growth and to bring in a $115 million bottom-line profit, Anderson said. If this happens, it will be the first year the company comes out of the red.

"During the past 12 months, we have grown revenues by 17 per cent, successfully completed the integration of Optus Vision and dramatically reduced operating costs as a percentage of revenue," Anderson said.

"This has put the company on a firm path toward sustainable growth."

He said C&W Optus had "cracked the software problems that caused our local call problems", and would be making an aggressive push into the local call market. C&W Optus holds just 1 per cent of the $5 billion local call market.

Anderson also said C&W Optus would be expecting "meaningful revenue" from Internet services and Premium TV.

On completion of the share offer, Dalziel will step down as chairman of the C&W Optus board. Dick Brown, chief executive of Cable & Wireless will become chairman. Brown joined the board in August, along with Cable & Wireless' executive director, finance, Robert Lerwill.

The offer will capitalise the company at $6.65 billion, making it one of the 15 largest companies in Australia.

Joint global coordinators for the offer are Merrill Lynch and Warburg Dillon Read.


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