Telkom the “perfect target” for Axian and former CEO

Madagascan telecom firm Axian sees Telkom as the perfect acquisition target to help it meet its goal of becoming the fifth-largest mobile network operator in Africa in the next five years, the Sunday Times reports.

Through its partnership with former Telkom CEO Sipho Maseko, Axian is in talks to acquire a controlling stake in the partly state-owned South African telecom company.

An unnamed source said South Africa would be an attractive country for telcos wishing to become pan-African operators as it is well-rated and has a strong telecom sector.

“It’s either you enter through small players and study the market before making a big acquisition, or you enter with a big player,” the source said.

It added that Axian is keen to acquire other businesses with strong infrastructure, particularly those with strong tower assets, fibre, and data centres.

In early May, the company was in advanced talks with the MTN Group to acquire its assets in Liberia, Guinea-Bissau and Guinea-Conakry.

The three countries accounted for 1.6% of MTN’s revenue in 2022.

The deal had not been finalised at the time, and there was no guarantee that a transaction would proceed.

Axian is trying to convince the South African government — which holds 40.5% of Telkom — to agree to cash in by significantly diluting its shareholding.

The Public Investment Corporation (PIC) holds 14.1% of Telkom. Axian is trying to convince it to participate in a joint bid for Telkom to give it a controlling stake in the telecom company.

PIC said it wouldn’t be drawn into speculation on the matter and added it would consider any proposal related to Telkom on its merit if it is supported by a credible business case and meets return expectations and the mandate requirements of the firm’s clients.

In late May, it was revealed that PIC is backing a bid by former Telkom CEO Sipho Maseko to acquire a 35% stake in Telkom. The deal would see it team up with Maseko’s Afrifund and Axian.

The 35% stake could also be combined with the PIC’s current shareholding to boost the overall holding of the group.

Axian’s bid for Telkom was proposed to its board in early March, and it faces some resistance from its board members.

Another unnamed insider told Sunday Times there would be no competition issues blocking the deal.

That’s in contrast to a potential acquisition by a company like MTN, which would likely take months for the Competition Commission to probe and could ultimately be rejected.

Now read: Telkom disaster

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Telkom the “perfect target” for Axian and former CEO