Telkom meets on takeover offer
TELKOM CEO Reuben September is understood to have met Nigerian entrepreneur Mike Adenuga Jnr to discuss Adenuga’s bold bid to create a pan-African telecoms giant by acquiring Telkom.
Adenuga has submitted a proposal to take over Telkom so he can merge his cellular operator, Globacom, with Telkom’s 50% stake in Vodacom.
Globacom cannot bid for the Vodacom shares directly, as Vodacom’s other 50%-owner, Vodafone, has the first right of refusal. So it can only access Vodacom by acquiring Telkom outright, although Adenuga’s plan leaves Telkom’s fixed-line operations as a listed entity, with no change in the shareholders.
Globacom would then merge with half of Vodacom, leaving Vodafone holding the other 50%.
On Friday, Telkom was forced to issue a cautionary acknowledging that it had received the offer. Its statement said it “has received a number of inquiries and expressions of interest in respect of one or more components of its business. Telkom has not entered into any discussions in respect of any of these expressions of interest.”
That was on Friday, however, and sources said September and Adenuga had now met. Telkom said it would evaluate any proposal it received to determine if it was in the best interests of shareholders, and if it was capable of being implemented in full.
Telkom is already far down the line in assessing a bid for Vodafone to pay R18,75bn for another 12,5% of Vodacom. It is also assessing a seemingly related bid from Mvelaphanda to buy its fixed-line assets, on condition that it first sheds its stake in Vodacom.
Vodacom CEO-designate Pieter Uys said Telkom had not briefed him on the Globacom offer. Uys is highly familiar with Adenuga and Globacom, however, as Vodacom once made overtures to buy Globacom when it was anxious to enter Nigeria for itself.
“We know Mike very well,” he said. “Once we tried to enter Nigeria by working with him, but we didn’t get to the point where we did detailed due diligence because the price was too high.”
Few financial details are set out in the offer sent last week. But it proposes that the new entity, dubbed Vodaglo, would be listed in Johannesburg with a market valuation of about R140bn. It would be equally owned by Globacom and Telkom.
Uys said the question now was whether Telkom’s shareholders, which include the government with 39%, would be interested in the bid by Nigeria’s second-largest cellular operator. He said the proposed merger would not resolve Vodacom’s problem of having two companies as its joint parents. “I need one boss, which makes it easier to get strategies approved. Having two bosses with different interests is always difficult. I prefer having a majority shareholder in order to drive strategic growth, whichever way it goes.”
Although Globacom would not touch Telkom’s fixed-line business, the two operators could work together in the rest of Africa to offer a bundle of fixed, mobile and internet services. That expansion with a cellular partner is what Telkom has been striving for, but has failed to achieve with Vodacom.
Loading ...