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Telstra Buy Back Calculator, Decision Time Is Looming
BY CHRISTOPHER HALL - 15/09/2016 | VIEW MORE ARTICLES BY CHRISTOPHER HALL

Get More Commentary, Discussion & Market Information On -

TLS  - TELSTRA CORPORATION LIMITED.


The phone has been running hot with Telstra shareholders trying to make sense of the letter Telstra sent them. If you were confused by the letter, you weren’t alone. I’ve collated the most common questions and have answered them here for you now.

For those wanting to cut to the chase – here is the calculator I use to see how much money clients will make in the TLS buy-back.

The top questions are:

  1. What does all this mean?
  2. Should I participate?
  3. How much money will I make, or lose?
  4. Am I better off selling the shares on the ASX?
  5. What if I do nothing?

What does all this mean?

Telstra posted out their offer to buy your Telstra shares directly from you, or what they call an Off-Market Buy-Back (OMBB).

For more background on the offer, read this article here 

Should I Participate in the Buy-back?

The answer is a two-pronged response after the clinical response to all financial questions: ‘it depends’.

Answers always depend on your personal circumstances, so let’s take the opportunity to say this is not personal advice or general advice, just reading the news announcements and plugging the numbers in. Make sure you check it all over with your accountant first or get the appropriate tax advice.

The two prong response is:
- How much money will I make?
- Am I better off selling the shares on the ASX?

How much money will I make?

Here is the calculator I use to get an idea of what the all-important after-tax return through buy-back would be.

Remember there are a few variables between now and when the offer closes, so all calculations are estimates.

Am I better off selling the shares on the ASX?

Again, the answer to this varies on the variables, especially the tax rate of the person/SMSF/entity holding the Telstra shares.

The calculator I use also produces the post-tax estimated return to compare against the Buy-back return.

When comparing the numbers, the decision to make should be fairly clear - but remember to check with your tax specialist first.

What if I do nothing?

If shareholders do nothing, there should be little difference to them in the weeks and months ahead.

Although there will be less shareholders to split the Telstra pie with, so technically each Telstra share will be worth that little bit more after this buy-back is completed.

If you’d like to contact us you can email us at questions@sharecafe.com.au



View More Articles By Christopher Hall

Christopher is head of equites at Spring Financial Group. Christopher has over 10 years' experience managing equities desks with thousands of retail clients and responsibility for maintaining and servicing retail and wholesale relationships.



 

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