High court rules in favour of Vodacom
The High Court in Pretoria ruled in favour of Vodacom and dismissed the application by the Congress of South African Trade Unions (Cosatu) and the Independent Communications Authority of South Africa (Icasa) to prevent its listing on the JSE, Cosatu said on Sunday.
Shares in Vodacom were bid at R110 on Monday ahead of its listing. An offer price has not been set because the listing is an unbundling, but some analysts expect the stock to trade at a minimum of R130.
The high court on Sunday threw out the bid by Cosatu and Icasa to block Monday’s listing of Vodacom, which is part of a deal that will give Vodafone control of the firm in one of South Africa’s biggest foreign direct investments.
Halting the deal on its eve would have dealt a huge blow to the country’s credentials as an investor-friendly emerging market and intensified fears of resurgent union clout under African National Congress leader Jacob Zuma, inaugurated as president on May 9.
Telkom has sold a 15% stake in Vodacom to joint owner Vodafone and is unbundling the rest to shareholders.
Vodacom’s chief executive said in a presentation ahead of the listing on Monday that Vodafone’s financial muscle and global clout would enable the South African company to reach more customers.
On Sunday Vodacom spokesperson Nicholas Williams welcomed the judgement, saying the company looked forward to the listing.
But Cosatu spokesperson Patrick Craven said Cosatu would continue to oppose the listing by all legal means, including launching a boycott of the telecommunications giant.
He said Cosatu felt that the ruling was bad news for all people in South Africa in favour of those with money.
Craven said Judge John Murphey had accepted initially that Cosatu and Icasa had a legitimate case.
The judge said the original application to stop the deal might have succeeded because Icasa and Cosatu had a good argument, but the damages done to South Africans were outweighed by the financial benefits and as such the court could not accept the application.
Craven said the need for the ownership to remain in South African hands was far more important than the inconvenience caused to share holders and executives.
He said Cosatu planned to continue opposing the listing by all legal means.—Sapa.