Vodacom’s Neotel Acquisition Plans “progressing well”

Mergers, Acquisitions and Financial Results

Vodacom is currently performing due diligence on Neotel following successful acquisition discussions between the companies. This is according to two independent industry sources close to the negotiations.

In May 2013 MyBroadband reported that Vodacom and MTN were in separate discussions with Neotel to acquire the fixed line operator.

The Sunday Times reported on 30 June 2013 that formal bids for the purchase of Neotel had to be submitted that week.

Well placed industry sources have now confirmed that Vodacom is busy investigating and evaluating Neotel’s value as part of its acquisition plans.

Neotel holds great value for South Africa’s largest mobile operators, partly because of its well-established fibre network and its valuable frequency spectrum.

Vodacom was asked for comment about their due diligence on Neotel, but the company would not confirm this information.

“We explore investment opportunities on a regular basis, but we can’t comment on any specific companies,” said Vodacom spokesperson Richard Boorman.

Neotel did not respond by the time of publication.

Update

Neotel said that this remains pure speculation, and as a matter of company policy, they do not comment on market speculation and rumours.

“Neotel has achieved positive revenue growth for the past [8] consecutive quarters and has been EBITDA positive since 2Q/FY12. Growth in enterprise and retail customer numbers continues to drive revenue growth and increasing EBITDA margins.  Neotel continues to be backed by its shareholders and supported by its lenders and other stakeholders,” Neotel said.