Telstra will pay AUS$18.9 million (US$12.47 million) for 10 percent of Sausage, purchasing 14 million ordinary shares at AUS$1.35 each (US 89 cents). It then has 40 million options over the same number of ordinary shares up until September 9, 2001, exercisable at AUS$1.35 (US 89 cents) each.
If the deal is approved by Sausage’s board, Telstra will hold nearly 40 percent of Sausage.
Telstra will be paying the same share price that Australian financial institution St. George Bank outlaid to gain a 6 percent stake in Sausage in May. Intel also obtained a 5 percent stake of the developer.
Both parties see the deal as a foot in the door of each other’s industries. According to Sausage director Wayne Bos, the purchase will secure a long-term relationship with the carrier, and move the developer closer to its goal of landing partnerships with corporations that will permit its spread into other areas.
“[This deal] will make us a formidable team, and deliver Sausage Software as a leading application service provider,” he said.
Telstra, meanwhile, is looking at its investment as another opportunity to cement its presence across the Internet industry, according to group managing director of convergent business, Ted Petty.
The agreement is subject to approval by an Extraordinary General Meeting (EGM) in September. If it is successful, Telstra will also have the option to appoint two director’s to Sausage’s board.