Cell C rejects Telkom takeover offer

Telkom has announced that its offer to acquire Cell C has been rejected, and the network has subsequently issued a statement withdrawing its previously-issued cautionary announcement.

The company previously stated that it was in discussions with Cell C to acquire the embattled mobile network, but these negotiations have now ended.

This was the third time that Telkom has attempted to acquire Cell C, but previously, Cell C chose to recapitalise with Blue Label Telecoms, which now has a 45% stake in Cell C, instead.

If Telkom’s acquisition of Cell C was successful, it would mean that Telkom would have a business boasting about 22 million subscribers – which, while significantly lower than the approximately 70 million subscribers of MTN and Vodacom, would pose a greater threat to the dominant mobile networks.

“Telkom has received written notice from the Cell C board of directors rejecting its non-binding proposal,” Telkom said in a statement to shareholders.

“The Telkom Board continues to believe the Offer is a compelling proposition that would have created significant value for all stakeholders including Telkom’s shareholders,” the company added.

Roaming agreement

As the offer has been rejected by Cell C, Telkom advised its shareholders that they are no longer required to exercise caution when dealing in Telkom securities.

Cell C recently announced that it had signed an expanded roaming agreement which would see Cell C reduce its expenditure on building out its national infrastructure.

This new deal builds on the existing roaming agreement that the two mobile networks entered into in 2018, which provided 3G and 4G services to Cell C customers outside of main metros.

The Independent Communications Authority of South Africa (ICASA) has become involved with this deal, however, stating that it will investigate the new expanded roaming agreement between MTN and Cell C.

Now read: Cell C shutting down Black

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Cell C rejects Telkom takeover offer