Telkom South Africa has said in a statement that it has suspended talks with the consortium lead by Mvelaphanda Holdings regarding a possible sale of the landline division to the group. Other talks with Vodafone regarding its holding in mobile operator, Vodacom are still continuing.
"The Company and the Consortium have jointly agreed to suspend discussions in response to, inter alia, current market conditions and pricing considerations," said Telkom in a statement to the stock exchange.
Vodafone, which already owns 50% of Vodacom has long coveted taking a majority control of the company and has been in talks with Telkom and other investors to boost its holding. 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.
The consortium lead by the Mvelaphanda Group also included US based private equity firm, Och-Ziff and other strategic investors. The Mvelaphanda Group is headed by former presidential hopeful Tokyo Sexwale. The plan was apparently for the consortium to take just the landline division and sell off the mobile arm in its entirety to Vodafone.
If Vodafone had taken 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.
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%.
At the beginning of this month, Nigeria based Globacom emerged as a possible spoiler in the talks after it expressed an interest in buying the 50% stake in Vodacom which is coveted by Vodafone. Earlier this year, Dubai-based Oger Telecom also started talks about a possible buyout of South Afrcia's Telkom - but the talks broke down in May.
Posted to the site on 18th September 2008
Posted to: www.cellular-news.com/story/33709.php