Telkom Said to Seek Cell C for Less Than $1.6 Billion Price
Telkom SA SOC Ltd. is seeking to buy mobile-phone operator Cell C Pty Ltd. for less than the 22 billion rand ($1.6 billion) value placed on the South African company by its owners, according to a person familiar with the situation.
Telkom, South Africa’s biggest landline company, is prepared to pay no more than 18 billion rand for the business, according to the person, who asked not to be identified as the matter is private. Cell C’s 75 percent shareholder, Dubai-based Oger Telecom Ltd., put the higher price-tag on the company, which includes 14 billion rand of debt, according to a second person familiar with the talks.
Telkom operates South Africa’s fourth-biggest mobile-phone provider and is seeking to grow the business to help offset declining sales at its larger fixed-line unit. Cell C is the country’s no. 3 wireless operator, behind market leaders Vodacom Group Ltd. and MTN Group Ltd. Telkom Chairman Jabu Mabuza said last month he sees an acquisition of Cell C as a possible way to expand the unit.
“We cannot comment as this is a shareholder matter,” Cell C spokeswoman Karin Fourie said by e-mail. Telkom is a publicly traded company and reports information when necessary, spokeswoman Jacqui O’Sullivan said by e-mail.
Telkom shares fell 1.1 percent to 66.79 rand as of 3:14 p.m. in Johannesburg, valuing the Pretoria-based company at 35.2 billion rand. The shares have declined 4.1 percent this year, compared with a 7.2 percent gain on the FTSE/JSE Africa All-Share Index. Telkom is about 40 percent owned by the South African government.
Cell C Chief Executive Officer Jose Dos Santos told Johannesburg’s Talk Radio 702 on Sept. 23 that the company has held talks with Telkom about a potential takeover. Telkom said Monday it’s in negotiations that could affect its share price, without giving further details in a statement to the stock exchange in Johannesburg.
Source: Bloomberg 28 September 2015