Telkom says former CEO Sipho Maseko’s offer remains unsolicited, exploratory, and non-consensual
Telkom has confirmed receiving an unsolicited, non-binding, indicative offer from a consortium led by former CEO Sipho Maseko for a controlling stake in the company.
Its confirmation follows several media reports about the proposed deal, the latest published yesterday in the Business Times.
Maseko’s Afrifund Investments is leading a consortium comprising Axian Telecom and the Government Employees Pension Fund, managed by the Public Investment Corporation, to acquire a stake in Telkom.
According to Sunday’s report, the consortium offered R46 per share in March for a controlling stake in the company, which the Telkom board rejected out of hand.
Telkom’s stock was trading around R38 at the time.
Since then, its share price plummeted below R30 following a warning to shareholders that it would likely report a significant decline of 465% to 485% in basic earnings per share for the 2022/2023 financial year.
Telkom’s share price traded up on the news that the consortium was willing to offer R46 per share. At the time of publication, it was trading at around R31.
Illustrative of its deep financial troubles, the board is considering a R13 billion impairment involving Openserve, Telkom Consumer, Gyro, and BCX.
Before this, MTN had offered to buy the whole company, reportedly at R60 per share, but the deal was torpedoed when Rain submitted a counter-proposal.
An insider told MyBroadband that MTN walked away from the deal because Telkom refused to give assurances that it would not run negotiations concurrently, slowing everything down.
Telkom’s version was that it refused to guarantee MTN exclusivity.
In January 2023, Telkom informed shareholders it terminated discussions with Rain because a deal was impossible.
Soon after, MTN Group CEO Ralph Mupita said that the strategic rationale for consolidation between MTN and Telkom remained.
“The company confirms that it has received an unsolicited non-binding indicative letter from the consortium for the acquisition of a controlling stake in Telkom, the merits of which are being assessed by the Telkom board of directors in accordance with its fiduciary duties,” Telkom said in a statement on Monday.
“In this regard, the company has requested the consortium to provide further clarity on several matters, including the proposed offer price and certainty of funding.”
Telkom said that, as such, discussions remain of an exploratory and non-consensual nature and that there is no certainty that the outcome of these discussions will result in a transaction.
“However, having regard to the continued detailed media speculation and Telkom awaiting further clarity, shareholders are advised to exercise caution when dealing in the Company’s shares until such time as a further announcement is made,” Telkom stated.
“Telkom continues to pursue its strategic value unlock initiatives and should such initiatives result in any developments that may have a material effect on the value of Telkom’s shares, information on such arrangements will be disclosed to shareholders.”
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