Neotel talking to BCX?
Market talk suggests that second network operator Neotel is eyeing Business Connexion (BCX) subsidiary BCX Communications. BCX cautioned shareholders on March 4 that it was in talks about the possible sale of its telecom business.
That cautionary notice was renewed on April 14.
IT industry insiders say Neotel is the suitor, but neither BCX nor Neotel will comment.
BCX Communications was created in 2005 when the IT group acquired Bidnet, an Internet service provider in the Bidvest stable. The business has performed poorly despite the giant Bidvest group being its anchor client.
Analysts say BCX failed to support the business properly when Telkom announced its R2,4bn all-cash offer to acquire the group.
At the time, reports suggested that BCX was helping Telkom win contracts at the expense of its own telecom subsidiary.
The competition tribunal ruled against Telkom’s proposed acquisition.
If BCX does sell, the move will raise tough questions from analysts, who are already critical of the new management team, led by CEO Benjamin Mophatlane.
The IT and telecom industries are rapidly converging and without a telecom arm, BCX could be at a competitive disadvantage.
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