Telkom pooh-poohs deal rumours
The company has denied that it has been approached by a Southeast Asian investment group.
Telkom on Wednesday denied speculation in the media that it has received a proposal from a Southeast Asian company or grouping for the sale of its mobile towers business in a deal that reportedly could be valued at as much as US$3bn.
On Tuesday, a report on a website called Business Tech said that the investment group, which, curiously, the website failed to name, wants to set up factories in South Africa to build tower infrastructure.
The website cited a “document” as its source of information that the investment group wants to buy 1 600 Telkom Mobile towers and build an additional 8 400 base stations to allow the operator, the country’s fourth to be licensed, to compete more effectively with incumbents MTN and Vodacom.
The mooted $3bn offer price for Telkom’s mobile assets is roughly twice the group’s entire market capitalisation, prompting experts to question the accuracy of the information contained in reports.
Carrim is the minister responsible for oversight of government’s 39,8% equity in the telecommunications operator and would presumably be apprised by Telkom management if any formal offer had been received.
Telkom’s share price ticked up by more than 2% by Tuesday’s close, possibly on the back of the speculation. However, it was trading slightly higher on Wednesday, shortly after the company denied that it had received a proposal. It had fallen briefly on the news, before bouncing up.
“Telkom would like to correct statements that have been widely published regarding the sale of its tower infrastructure,” the company said in a statement on Wednesday. “The company has not received any proposal from a Southeast Asian company for the sale of its mobile towers business or an investment of $3bn.”
It said that it “continues to review its operations in an effort to stabilise the business and unlock value”.
“The company is therefore engaging with various parties to consider best options for the business. We will inform the market and all our stakeholders of any decisions made at the appropriate time.” — (c) 2014 NewsCentral Media