Cell C rejects Telkom's takeover offer
Telkom believes that its offer was compelling and would create value for shareholders.
South Africa’s third-largest mobile operator Cell C has rejected a takeover offer from Telkom.
Telkom announced on Friday that the offer was rejected by Cell C’s board of directors, adding that it continued to believe the offer was “a compelling proposition that would have created significant value for all stakeholders including Telkom’s shareholders.”
“The Telkom board continues to believe the offer is a compelling proposition that would have created significant value for all stakeholders including Telkom’s shareholders,” it said.
“As the offer has been rejected by Cell C’s board of directors, Telkom shareholders are advised that they are no longer required to exercise caution when dealing in Telkom securities.”
Telkom had confirmed market speculation about the potential acquisition earlier in November, with the group focusing heavily on mobile operations.
Telkom is 40 percent owned by the state. Telkom has been working to transform its business away from fixed-line provision to a data services player. If successful, the combination of Cell C and Telkom would have created a strong competitor to Vodacom and MTN. Of the 95-million active SIM cards in SA, MTN and Vodacom have 70-million.
The possible merger comes as Cell C explores options with MTN and local investors known as the Buffett Consortium to recapitalise the company, which may include the sale of some of its assets.