South Africa’s Telkom has agreed to purchase Business Connexion (BCX), a local ICT company, for around R2.67bn (US$257m).
In a stock exchange announcement, Johannesburg-listed Telkom said BCX shareholders would receive R6.60 per share, a 20% premium…
South Africa’s Telkom has agreed to purchase Business Connexion (BCX), a local ICT company, for around R2.67bn (US$257m).
In a stock exchange announcement, Johannesburg-listed Telkom said BCX shareholders would receive R6.60 per share, a 20% premium on the company’s market price as of 15 April, prior to the cautionary announcement.
Seven years ago, Telkom had already tried to buy BCX but the deal failed on regulatory hurdles.
Explaining the rationale behind the new bid, Telkom said it “has embarked on a strategy to improve performance and one of the key considerations in respect of this strategy is to grow beyond its core business of connectivity by expanding into ICT services”.
The offer is fully funded by Telkom’s cash resources. BCX will become a wholly-owned subsidiary of Telkom and will be delisted from the Johannesburg stock exchange following deal closure.
BCX has mandated Investec Bank for advice on the transaction while Telkom hired Absa Bank.
As part of its strategy to improve performance, Telkom recently agreed a network sharing pact with larger rival MTN to revive its struggling mobile operations.
The country’s dominant wireless player is Vodafone’s Vodacom, followed by MTN, Cell C and Telkom.
