The Telstra Corp Ltd (ASX: TLS) share price found itself as one of the top-performing S&P/ASX 200 Index (ASX: XJO) shares on Wednesday.
After a solid day in the green, the Telstra share price was up 4.44% at market close, trading at $3.76.
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What's driving the Telstra share price?
Investors were buying up shares in the blue-chip telco giant after the company announced that it had sold a 49 per cent interest in its Telstra Infraco Towers business.
Telstra advised that a consortium comprising the Future Fund, Commonwealth Superannuation Corporation and Sunsuper agreed to acquire the 49 per cent interest and come on board as a strategic partner.
The transaction is expected to be completed in the first quarter of FY22, with Telstra expecting to receive net cash proceeds after transaction costs of $2.8 billion.
Telstra advised that it intends to return approximately 50 per cent of the proceeds to its shareholders in FY22, including a potential share buy-back.
The company said that it will use remaining proceeds towards debt reduction to "maintain balance sheet strength and flexibility".
What did management say?
Telstra CEO, Andrew Penn welcomed the significant milestone, saying:
Our T22 strategy is delivering on multiple fronts and I am proud of what we have achieved.
Today's announcement is a further endorsement of the strategy, as the establishment of our infrastructure assets as a separate business was designed to enable us to better realise the value of these assets, take advantage of potential monetisation opportunities and create additional value for shareholders and that is exactly what today's announcement achieves.
Telstra share price rallies to pre-COVID levels
The Telstra share price has been a standout performer in 2021, lifting by almost 25% year-to-date.
Telstra shares haven't traded at $3.70 levels since 24 February 2020, right before the COVID-19 induced selloff.
While today's transaction appears to be great news in terms of shareholder value, Goldman Sachs thinks the business has a lot of room to grow, and lifted its share price target to $4.20 yesterday.
