Telstra pips rivals to Trading Post

SYDNEY: Australia’s dominant telecommunications firm Telstra Corp Ltd has emerged as the winner in a scramble to buy print and online classified advertising group Trading Post and take a bigger share of the small-ads market from mainstream media rivals. 

Telstra’s wholly owned Sensis unit, which owns the Yellow and the White Pages directories, paid A$636mil cash to Dutch firm Trader Classified Media NV for Trading Post, whose 20-odd publications and five websites in Australia advertise everything from pets to cars. 

Telstra said Trading Post would lift Sensis’ total ad market share to around 15% from 13%. It would also provide a boost of around A$64mil in fiscal 2005 earnings before interest, tax, depreciation and amortisation (EBITDA). 

Telstra said the price it paid for Trading Post was around 10 times forecast 2004/05 EBITDA. 

Newspaper publisher John Fairfax Holdings Ltd, which Telstra chief executive Ziggy Switkowski and chairman Bob Mansfield had wanted to merge with Sensis, was originally tipped as the front-runner to buy Trading Post, with Kerry Packer’s Publishing and Broadcasting Ltd also seen as a potential buyer. 

Telstra’s acquisition plans have been in the spotlight in recent weeks after its ambitions for Fairfax came to light and it emerged as a potential buyer of a stake in Indonesia’s third biggest phone company, PT Excelcomindo Pratama. Telstra repeated, however, that it had no plans for substantial offshore purchases. 

While 51% government-owned Telstra is adding bolt-on acquisitions to its directories business, other former monopoly telecoms firms, such as British Telecom, Singapore Telecommunications Ltd and SBC Communications, have sold their Yellow Pages operations – often to private equity funds. 

“Telstra is the only telco in the Western world which is so vertically integrated. The rest of the world has moved on,” said independent telecoms analyst Paul Budde. – Reuters

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