On The Money - In Brief

Mergers, Acquisitions and Financial Results

- Information and communication technology (ICT) outsourcing group Business Connexion (BCX) has taken its 'for sale' signs down. The group cancelled its cautionary announcement, saying the discussions with regard to expressions of interest had been terminated. It engaged the services of a merchant bank, believed to be Investec, to facilitate this process. Telkom was one of the possible bidders, as was Altron Group subsidiary Bytes Technology Holdings. Consensus was that Telkom would have the larger chequebook to do the deal, and industry players expressed unhappiness at the prospect of the company going to Telkom. Some said they would oppose the deal at the Competition Commission, others said they would ask for certain conditions to be imposed to lessen the potentially anti-competitive effects.

Shortly after BCX announced the negotiations had been terminated, Bytes cancelled its cautionary announcement, which it said had involved “preliminary discussions” between itself and a third party. Although it never officially confirmed it was interested in BCX, the timing of their cautionary announcements at the outset and now, their cancelled cautionaries, cannot be a coincidence. This is the second time that BCX has apparently been up for sale: about a year ago discussions, rumoured to be with Telkom, came to nothing.

- Telekom Malaysia (TM) has announced plans to cease all operational and managerial control of Guinean telco Societe des Telecommunications de Guinee (Sotelgui), in a move to exit the country altogether. The Malaysian telco currently holds a 60% stake in Sotelgui, while the Guinean government holds the remainder. TM’s decision to exit Guinea is part of a broader plan to dispose all of its African investments.

- The MTN Group has acquired a 100% stake in Libertis Telecom, which has 190 000 subscribers, or a market base of less than 40%, in the Congo for a consideration of $102,5-million (R650-million. The country, whose other mobile operator is Kuwaiti-held Celtel, is home to 3,5-million people and its mobile penetration is estimated at 14%. The Congolese deal increases MTN's footprint to 11 countries and comes just weeks after the South African company announced it had paid a €500-million licence fee in Iran for a 49% stake in that Middle East's country's second mobile operator. MTN is also eyeing the Namibian and Tunisian cellular markets as well as the fixed-line market in Nigeria, where it has close to eight million mobile subscribers.