Telkom continues talks with MTN, Vodafone

South African fixed-line telephone operator Telkom said in a cautionary announcement on Thursday that its discussions with Vodafone and MTN are still ongoing.

Telkom said discussions were part of its mobile-strategy review, and that shareholders are advised to continue exercising caution when dealing in their shares until a further announcement is made.

In a separate announcement, MTN said that the discussions in progress between MTN and Telkom concern a proposed transaction over certain assets of Telkom.

MTN added that should the proposed transaction materialise, it might have an impact on its share price.

According to a trader, there is speculation in the market that Telkom could sell its stake in Vodacom to Vodafone, and that MTN could approach Telkom for the balance of the company, which would be made up of its fixed-line structure.

Telkom owns 50% of Vodacom, and Vodafone owns the rest.

However, in mid-September there were reports claiming that Vodafone was not interested in the full stake of Vodacom.

According to the reports, Arun Sarin — the CEO of Britain’s Vodafone Group — said that Vodafone wasn’t interested in buying Telkom’s stake because it might have to sell part of the stake at a discount, even though it did say that it was interested in increasing its stake in Vodacom. — I-Net Bridge

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Nicole Rego
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