South African fixed-line phone firm Telkom has offered to buy an African internet service (ISP) provider for £9,72-million in a deal that would mark its first foreign foray as it tries to offset sagging revenues at home.
Telkom said in a statement on Monday it was in talks with unlisted London-based African Lakes Corporation to buy its ISP Africa Online, which offers internet services in nine countries.
African Lakes said in a separate statement it had agreed to sell the business to Telkom for £9,72-million, a 35% premium to a rival offer by Africa Telecoms Company, which is owned by Kenyan and United States investors.
A source close to the deal told Reuters last month Telkom was poised to bid for Africa Online, trouncing African Telecoms’s bid.
Africa Online would give Telkom a foothold in Côte d’Ivoire, Ghana, Kenya, Namibia, Swaziland, Tanzania, Uganda, Zambia and Zimbabwe.
The deal would help Telkom beef up its data business as it seeks to exploit untapped demand for internet access in Africa.
Telkom has been scouring for opportunities to expand in Africa for several years as it faces tighter competition at home from mobile operators and a new fixed-line phone firm.
The deal is still subject to shareholder approval.
Africa Lakes said it had backing for the deal from shareholders holding more than 41,1% of the company’s voting rights and that it believed it was capable of securing backing from a majority of investors.
The board said it was recommending the offer be accepted. — Reuters