This off-market tender buy-back (Buy-Back Tender) was announced to the market on Thursday, 11 August 2016. The terms of the Buy-Back Tender are set out in the Buy-Back Tender Booklet which was lodged with the ASX on Wednesday, 24 August 2016 and is available at www.telstra.com/buyback. This Notice provides specific information to Participants in relation to the Buy-Back Tender and details the process for submitting a Tender through CHESS.

Under the Buy-Back Tender, Telstra Corporation Limited (TLS) is proposing to buy back up to approximately $1.25 billion worth of TLS ordinary shares. TLS retains the discretion to alter the buy-back size depending on a number of factors including shareholder demand, market conditions and forecast future capital requirements.

Under the Buy-Back Tender, Ordinary shares may be tendered by eligible TLS Shareholders at any of the specified discounts in the Tender Discount Range of between 6 per cent and 14 per cent inclusive (at 1 per cent intervals) to the Market Price or as a Final Price Tender (which is simply an election to receive the Buy-Back Tender Price).

If TLS determines to buy back Ordinary shares under the off-market tender process, TLS will buy back all Ordinary shares tendered by eligible Shareholders who elect to receive the Buy-Back Tender Price (i.e. Final Price Tender) or who tender their Ordinary shares at a discount equal to or greater than the Buy-Back Tender Discount determined under the tender process, subject to any required scale back and, if applicable, any Minimum Price conditions.

Eligible Shareholders who hold 880 ordinary shares or less must tender all of their Ordinary shares (at one Tender Discount or as a Final Price Tender) if they wish to participate in the Buy-Back Tender. Eligible Shareholders who hold more than 880 ordinary shares may tender any number of ordinary shares they hold (at one or more Tender Discount and/or as a Final Price Tender), subject to a minimum 880 Ordinary shares (in aggregate). The maximum number of Shares that an eligible shareholder is entitled to tender in the Buy- Back Tender is set out on their personalised Tender Form and is also stated via the online tendering process. (Please refer to section 2.5 of the Buy-Back Tender Booklet for further information).

Each shareholder who successfully tenders under the Buy-Back Tender is guaranteed that a Priority Allocation of 880 Ordinary shares will be bought back and will not be subject to any scale back. All Ordinary shares that are accepted by TLS will be bought back at the Buy-Back Tender Price, even if they are tendered at a discount that represents a price below the Buy-Back Tender Price, subject to any required scale back and, if applicable, any Minimum Price conditions. 

Participants may submit tenders through CHESS for Eligible TLS Shareholders to participate in the Buy-Back Tender. 

Capitalised terms not defined in this notice have the same meanings as used in the Buy-Back Tender Booklet. 

What do I need to do by when?

CHESS will process acceptance messages received no later than 7.00pm (Australian Eastern Standard Time) on Friday, 30 September 2016. An Eligible Shareholder may only tender the number of Shares they hold as at the Buy-Back Tender Record Date (19 August 2016) that confer an entitlement to participate in the Buy-Back Tender, as set out in Part A on their personalised Tender Form (or stated via the online tendering process). 

The Telstra Share Registry will endeavour to contact a Controlling CHESS Participant on behalf of an eligible CHESS holder and relay an instruction received. It is the Controlling CHESS Participant’s responsibility to acknowledge and accept an instruction. Neither Telstra nor the Telstra Share Registry will be responsible should a Controlling CHESS Participant not acknowledge and accept an instruction.

Withdrawal Process

A Participant may withdraw a Tender by transmission of an EIS type ‘085’ message (Takeover Acceptance Removal Request Message) such that it is received no later than 7.00pm (Australian Eastern Standard Time) on Friday, 30 September 2016 (Please refer to Buy-Back Tender Booklet section 3.2 for further information). 

Amendment of Tenders

Each parcel of Shares tendered at one of the specified discounts in the Tender Discount Range or as a Final Price Tender, including a Tender made conditional on a Minimum Price, is a separate Tender.

A Participant who receives instructions from a Sponsored Holder (i.e. CHESS Holder) to amend the Tender Discount and/or Minimum Price for a specific Tender must process the amendment by withdrawing the relevant Tender entirely and replacing it with a new Tender. A Participant may withdraw a Tender by transmission of an EIS type ‘085’ message (Takeover Acceptance Removal Request Message) and replace it by transmission of an EIS type ‘031’ message (Takeover Acceptance Message).

Both messages must be received no later than 7.00pm (Australian Eastern Standard Time) on Friday, 30 September 2016 in order for the previous Tender to be replaced with the new Tender.

The effect of the Controlling CHESS Participant amending one or more Tenders will be to withdraw those Tenders, and in the case of an amendment to replace the amended Tenders with new Tenders. 

Please refer to General Information for further details concerning the processing of Takeover Acceptance Removal Request Messages. 

Small Holding Tenders

A Small Holding Tender is a Tender submitted by an eligible TLS Shareholder who has tendered all of their Shares at one or more Tender Discounts equal to or greater than the Buy-Back Tender Discount and/or as a Final Price Tender, and who would otherwise be left with 350 Shares or less as a result of the acquisition of a Priority Allocation and any scale back. Where a Small Holding Tender arises, it will be accepted in full by Telstra. (Please refer to Buy-Back Tender Booklet section 2.6 for further information). 

Minimum Price condition

Shareholders have the option of making their Tender conditional on the Buy-Back Tender Price being no less than one of the four specified Minimum Prices set out on the Tender Form. If the Buy-Back Tender Price is below the Shareholder’s selected Minimum Price, the Tender will be rejected and no Shares will be bought back by TLS. Shareholders who choose to nominate a Minimum Price must do this in addition to nominating a Tender Discount or electing to make a Final Price Tender. Tenders received from Shareholders who nominate a Minimum Price, but fail to nominate a Tender Discount or a Final Price Tender, will be invalid. 

DRP with respect to FY2016 final dividend

Shareholders may only tender Shares registered in their name on the Buy-Back Tender Record Date. As shares provided under the DRP with respect to the FY2016 final dividend will not be allocated to shareholders until Friday 23 September 2016, and therefore after the Buy-Back Tender Record Date, those shares do not carry an entitlement to participate in the Buy-back Tender and therefore cannot be tendered into the Buy-Back Tender (other than if eligible as a Small Holding Tender – please refer to sections 2.6 and 2.13 of the Buy-Back Tender Booklet for further information). 

Ineligible Foreign Shareholders

The Buy-Back is not being made to Ineligible Foreign Shareholders.  In particular, the following shareholders are not entitled to participate, directly or indirectly, in the Buy-Back Tender:  (i) any person who is located or resident in the United States; (ii) any U.S. person (within the meaning of Regulation S under the U.S. Securities Act of 1933, as amended); and (iii) any agent, fiduciary or other intermediary acting on a non-discretionary basis for a principal giving instructions from within the United States; or (iv) any person who has a registered address in Canada. 

Copies of the Buy-Back Documents are not being mailed or otherwise distributed or sent into the United States.

American Depositary Receipts evidencing American Depositary Shares that represent shares of Telstra may not be tendered in the Buy-Back Tender.

Trustees, Nominees and Omnibus Holdings

Trustees and Nominees who hold shares should inform the beneficial holders of the Shares about the Buy-Back Tender, subject to any legal restrictions in the countries where such beneficial owners are resident and provided such persons are not Ineligible Foreign Shareholders, and then aggregate all Tenders received from beneficial owners. It is the responsibility of the trustee or nominee to complete one aggregate Tender Form on behalf of all beneficial holders.

If you are a nominee of, or otherwise hold the shares registered in your name for the account or benefit of (i) a person located or resident in the United States, (ii) a U.S. person, (iii) a person who is an agent, fiduciary or other intermediary acting on a nondiscretionary basis for a principal giving instructions from within the United States, or (iv) a person who has a registered address in Canada, you should not:

• send or otherwise distribute this notice, the Buy-Back Tender Booklet or the Tender Form to that person; or 

• solicit or otherwise facilitate the participation of that person in the Buy-Back Tender. 

Under no circumstances should you accept any delivery, whether by mail, courier or other means, of any written communication relating to the Buy-Back Tender that is postmarked in, bears a return address in, or otherwise appears to have been dispatched from, the United States, or Canada.  Acceptance of such deliveries should either be refused or, if this is not possible (e.g., in the case of the mails or articles that are not identifiable without opening), the written communication should be promptly returned to the sender without acknowledgment or action upon it.  Electronic mail, telex or facsimile transmissions from the United States or Canada should not be acknowledged or acted upon in any manner.

An acceptance should be rejected and returned to the holder along with all accompanying documents if the accepting shareholder appears to have dispatched its acceptance from the United States or Canada or if you otherwise have notice that the tendering holder is a U.S. investor (e.g., the holder provides a U.S. bank account for payment or has a U.S. taxpayer identification number).

It is your responsibility to aggregate all instructions you receive from underlying beneficial owners (other than Ineligible Foreign Persons) and submit one combined tender form or instruct your Controlling Participant to process the Tenders through CHESS. 

Please be aware that, consistent with market practice and legal requirements, any scale back of Tenders will be applied on a registered holder basis only.

By completing and returning the Tender Form or submitting a Tender through CHESS, you warrant that: 

• you are a person to whom the Buy-Back Tender Invitation may lawfully be made, can receive the proceeds of the sale of your shares, and whose participation in the Buy-Back Tender is permitted under the laws of the jurisdiction in which you are a resident, and that you are not an Ineligible Foreign Shareholder;

• you are not (nor are you acting for the account or benefit of) a U.S. person, a person located or resident in the United States or a person who is otherwise an Ineligible Foreign Person;

• if you are acting in a fiduciary, agency or other capacity as an intermediary, then either (a) you have full investment discretion with respect to the shares being tendered or (b) the person on whose behalf you are acting was located outside the United States at the time he or she instructed you to tender shares in the Buy-Back Tender;

• you have not distributed or sent the Buy-Back Tender Documents or other documents referring to the Buy-Back Tender in or into the United States or to any U.S. person, holder of an American Depositary Receipt, or Ineligible Foreign Shareholder;

• you have not utilized in connection with the Buy-Back Tender, directly or indirectly, mail or any means or instrumentality (including without limitation, facsimile transmission, telephone and internet) of interstate or foreign commerce of, or any facility of a national securities exchange of, the United States; and 

• you are not tendering shares represented by American Depositary Shares that are evidenced by American Depositary Receipts.

Telstra reserves the right to treat as invalid any tender that appears to have been submitted by, or on behalf of, a shareholder who is not entitled to participate in the Buy-Back Tender. 

Conversions

Participants are warned that effecting a conversion of Shares before and/or during the Buy-Back Tender Period may adversely interfere with the tender process to the disadvantage of the client. Accordingly, Telstra’s Share Registry (Link Market Services Limited) requests that Participants refrain from converting their Shares during the Tender Period from 5 September 2016 to 30 September 2016 inclusive. 

For further information regarding the offer please contact the Telstra Share Registry Information Line on +61 1300 88 66 77 (Monday to Friday 8.30am to 5.30pm Australian Eastern Standard Time) or 800 835 787 within New Zealand.

Need more information?

Issued by

Cheng Zhang, Senior Officer, Post Trade Operations

Contact information

Cheng Zhang
1800 623 571
cad@asx.com.au

General Information

Participants should refer to Section 13 of the CHESS Procedure Guidelines for Participants and Section 14 of the ASX Settlement Operating Rules for further information concerning the processing of Takeover Acceptance Messages & Takeover Acceptance Removal Request Messages for a CHESS holding of securities. Some of these issues are summarised below.

A Participant must submit acceptance of an offer by transmission of an EIS type ‘031’ message (Takeover Acceptance Message) where the securities in Question are held in a CHESS Holding. The Participant will receive a ‘032’ message (Effected Takeover Acceptance Message) from CHESS in response.

In addition to the electronic notification to the Participant, paper notification will be sent directly to the Holder as securities are reserved in an offer-accepted subposition. Any change to the balance of securities in the subposition will generate further electronic notification to the Participant and paper notification to the Holder.  

Where a Participant receives instructions from a Sponsored Holder, the Participant is required under the ASX Settlement Operating Rules to submit an acceptance as follows:

If the Holder specifies the time when or by which the offer must be submitted, in accordance with those instructions; otherwise by End of Day on the date of receipt of instructions from the Holder, where the offer closes on the date of receipt of instructions then prior to the close of the offer.

Participants should therefore retain, as a minimum, a record of the date on which instructions to accept an offer is received from a Sponsored Holder.

If Securities in a CHESS holding have been reserved by ASX in an offer accepted subposition, a release of the Securities from that subposition may be initiated by a Valid Originating Message if the Holder of the Securities to which the tender relates is legally entitled.

A Participant must initiate removal of a Takeover Acceptance Message by transmission of an EIS type ‘085’ message (Takeover Removal Request Message) where the securities in Question are held in a CHESS Holding. The Participant will receive a ‘086’ message (Acceptance Removal Request Message) from CHESS in response.    

In addition to the electronic notification to the Participant, paper notification will be sent directly to the Holder as securities have been removed from an offer-accepted subposition. Any change to the balance of securities in the subposition will generate further electronic advice to the Participant and paper advice to the Holder.

Participants should therefore retain, as a minimum, a record of the date on which instructions to withdraw Securities are received from a Sponsored Holder.

Disclaimer