The share price of JSE-listed IT group Business Connexion (BCX) fell sharply on Wednesday morning after it withdrew a cautionary announcement that it was in talks that could affect its share price.

The talks were strongly rumoured to be related to a potential purchase of the company by giant French telecommunications company Orange.

BCX’s share price was trading down more than 5% on Wednesday morning after it withdrew the cautionary on Tuesday night.

Three separate industry sources told TechCentral in September that BCX was in discussions with Orange, which has long been rumoured to be sniffing around the SA market for an acquisition. BCX management has declined to elaborate on the nature of the cautionary, which was first issued on 11 August, before being renewed on 23 September and again on 3 November.

If BCX had been bought by a foreign player, it would have been the largest foreign direct investment in SA’s technology sector since last year’s blockbuster R24,4bn acquisition by Japan’s Nippon Telegraph and Telephone of Dimension Data.

Analysts polled by TechCentral in September suggested an Orange/BCX tie-up would have made sense because it would have aligned with both companies’ plans to expand more aggressively in Africa.

In 2006, Telkom offered to buy BCX for R2,4bn, but this was thwarted by the competition authorities over concerns the deal would have a negative impact on competition in the IT market. Telkom this week said it was again considering acquisitions in the information and communications technology industry. — Duncan McLeod, TechCentral