Untowards it was not
Not at all, says BCX financial director Alan Farthing. He says the share options were about to expire and that he and CEO Peter Watt would have lost out if they had not cashed them in. The two sold shares for more than R5,6m last week.
With no reasons given at the time for the exercising of the options, analysts were at first confused because it is most unusual for directors to start selling shares when a large deal is about to be concluded.
It was thought that either Watt and Farthing had made some kind of time/value calculation of the shares, giving them a higher valuation than they could get when the deal was concluded in a year ; or, more ominously, that there was something wrong with the deal.
The two made a bundle from the sale, as strike prices on the share options were as low as R1,51/share. They were sold off at between R8,70/share and R8,75/share.
Watt and Farthing could have made more if it had been possible to hold off on exercising the options until Telkom’s offer of R9/share for the outstanding share options in BCX had come through.
Telkom even sweetened the deal by agreeing that BCX pay a dividend of 25c/share after shareholders meet on implementing a scheme of arrangement .
If the deal doesn’t go through it will not be because Telkom couldn’t get the support of BCX shareholders. It already has the support of five of the technology company’s largest shareholders, which together hold over 50%.
The biggest obstacle now is expected to come from the competition authorities. But Telkom executives say privately they are confident the deal will not be blocked.
Whether Telkom is prepared to retain BCX’s top management once it gets control, it will not say. It says that only when the deal is finalised will it be in a position to tackle this issue.
If it does go ahead, BCX will continue to operate as a standalone or separate business unit within Telkom.
This is the second time within a matter of months that Telkom has bid for control of BCX. It ended negotiations in November because it thought the technology company was asking too much, but came back a few months later.
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