Africa-Press – South-Africa. Shares in SA’s third-biggest mobile operator Telkom fell 5% on Friday, shortly after it said it had officially called off talks with a consortium led by former CEO Sipho Maseko and backed by the Public Investment Corporation (PIC).
Following a number of media reports, Telkom confirmed in June it had been approached by consortium that also includes Axian Telecom along with Maseko’s Afrifund Investments, but subsequently said it “felt strongly” that the offer to acquire a controlling stake undervalued it. It also had said there were concerns about the consortium’s funding, but that it was open to further talks.
Telkom said in a brief statement on Friday that having considered the proposal, it had decided not to continue discussions, being of the view that it isn’t in the best interests of shareholders, and that its current strategy will yield better results.
Telkom, valued at about R14.5 billion on the JSE, has seen its share price fall by a fifth in the past year, and it reported a hefty loss in its year to end-March, when it was hit by writedowns, restructuring costs and load shedding. It had R16.8 billion in net debt at period end.
The group, however, has said it won’t be pressured into selling off its assets for less than they are worth, and has been actively considering corporate actions, including the possible sale of its masts and tower business, Swiftnet, as well as a strategic partner to build scale in its ICT services business, BCX. It has also said it does not see itself being diluted down to a minority shareholder in its fibre business, Openserv.
After spending much of Friday trading higher, shares in Telkom were down about 5% to R28.40 in late afternoon trade and have fallen over 40% in the past five years.
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