South Africa’s Telkom said on Monday it was in talks with Britain’s Vodafone and MTN, sparking talk it wants to sell its fixed-line business and its stake in cellphone operator Vodacom.
Telkom gave no further details. Vodafone and MTN — sub-Saharan Africa’s biggest cellphone operator — said separately the talks were at a ”very preliminary stage”.
”We’ve said before that we are interested in increasing our stake in Vodacom,” Vodafone spokesperson Mark Percy told Reuters. Vodafone owns 50% of Vodacom, and Telkom owns the rest.
Telkom shares rose as much as 10,68%, before closing 8,39% firmer at R190,99. MTN fell 2,57% to R106.
The Sunday Times reported Telkom was close to selling its 50% stake in Vodacom to Vodafone. It also reported MTN and a private consortium were bidding to acquire Telkom’s fixed-line assets.
”The bottom line is if these talks are successful, then clearly we shall see some take out and value being released in Telkom’s fixed-line business,” Renaissance Specialist Fund Managers portfolio manager, Khulekani Dlamini said.
Analysts have said the synergies Telkom had hoped to achieve with Vodacom have not materialised as the two compete in areas including delivery of data and internet access.
Telkom has launched its own pay-TV unit, Telkom Media, while Vodacom has gone into partnership with media group Naspers’ pay-TV unit MultiChoice.
Cadiz African Harvest portfolio manager, Rajay Ambekar said the key to doing a deal would be the price of Telkom’s 50% stake in Vodacom and possible regulatory hurdles for MTN’s purchase of the fixed-line business. — Reuters