Will Telkom be successful in buying Cell C?
According to reports, Telkom – 40% of which is owned by the South African government – is in talks to buy Cell C.
Telkom currently operates SA's fourth-biggest mobile-phone provider, Telkom Mobile. If the acquisition is successful, it will see the addition of the country's third-biggest cell phone company to its wireless unit.
Earlier this year, Telkom reported that its active mobile subscriber base had grown to just over 2.1 million subscribers. Cell C previously reported that it has 22 million subscribers. MTN has 29 million, and Vodacom some 30 million.
Saudi Arabia's Oger Telecom is Cell C's biggest shareholder, with a 75% stake in the South African mobile network. Oger Telecom has allegedly already rejected a R14 billion ($988 million) offer from Telkom for its 75% stake.
In a recent SENS announcement Telkom said:
"Shareholders are advised that Telkom is in discussions regarding a potential transaction to acquire all of the shares of Cell C... Such transaction, if successfully concluded, may have a material effect on the price of Telkom's securities."
Telkom is currently doing due diligence, and said in a statement that it will update shareholders accordingly.