Telstra buys Chinese SouFun real estate website for A$342 million

, posted: 31-Aug-2006 17:12

TelstraAustralia's telco incumbent today called an urgent media conference to announce that it has purchased 51 per cent of the Chinese property website SouFun for A$342 million. It is also at the same time selling Australian Administration Services (AAS) for around $215 million.

SouFun was started by Vincent Mo, and has large audience in China - according to Bruce Ackhurst, CEO of Sensis, which manages Telstra's directories and advertising business. It has some 40 million users and 400,000 advertisers and is seeing revenues double annually. Telstra expects Soufun to bring in A$52 million and expects the transaction to have paid for itself within four years.

Before the announcement, there was talk that Sensis would purchase Telecom New Zealand's directory business, which are now on the block. However, Telstra decided to go further offshore instead and tap into the massive Chinese market.

Vincent Mo will stay on at the helm of SouFun, with Sensis managers joining him.

Trader Classified Media NV in the Netherlands, which operates, bought a 15 per cent stake in SouFun in 2005 for US$22.5 million. It had call options to increase the stake over the next two years to between 45 and 100 per cent, for a total of US$200 million.

This means Telstra paid just over two-and-a-half times more than TCM for its majority stake in SouFun.

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