Telkom Says Talks Still Ongoing on Vodacom Sale to Vodafone

South Africa's landline operator, Telkom has issued a statement confirming that talks are still ongoing regarding a possible sale to Mvelaphanda Holdings and the disposal of its stake in mobile operator, Vodacom. The consortium is lead by the Mvelaphanda Group, US based private equity firm, Och-Ziff and other strategic investors. The Mvelaphanda Group is headed by former presidential hopeful Tokyo Sexwale.

Last year the company pulled out of talks to split itself in half and sell its landline assets to MTN with Vodafone taking the mobile side of the business. MTN itself is in various merger or takeover talks with India's Reliance Communications at the moment.

If Vodafone takes the Vodacom stake, it would still need to set aside a portion of the company for the black economic empowerment (BEE) transaction which was recently finalised and keep the company listed on the local stock exchange. A person familiar with the matter said that Vodafone is interested in an additional 12.5% stake in Vodacom, which would give it control with a total 62.5% interest.

Currently, the South African government owns 38.9% of Telkom, the Public Investment Corporation (PIC) owns 15.3%, and the politically connected Elephant Consortium owns 5.7%.

Earlier this year, Dubai-based Oger Telecom also started talks about a possible buyout of the company - but the talks broke down last month.

Posted to the site on 15th July 2008