The board of Cell C has rejected overtures from rival Telkom to acquire the mobile operator and said it is “unable and not willing to pursue any discussion” with South Africa’s fixed-line incumbent.
The move appears to pave the way for the consummation of a R5,5bn deal with JSE-listed Blue Label Telecoms, which plans to acquire 45% of Cell C as part of a significant structural shake-up that will also see management and staff investing in South Africa’s third-largest mobile provider.
In a statement on Thursday, Cell C chairman Mohammed Hariri said that the company has “already entered into legally binding agreements in terms of which it has committed to a recapitalisation transaction with, among other parties, Blue Label Telecoms”.
“Among other things, Cell C has undertaken not to enter into any agreement, incur any obligation or take any action which may restrict it or any of its affiliates from complying with its obligations under such agreements or which could result in the transactions envisaged in such agreements not proceeding to completion,” Hariri said. “Cell C has every intention of complying with its obligations under such agreements.”
He confirmed that Cell C’s board has received an “unsolicited, non-binding and conditional proposal from Telkom”, but that following a board meeting on Wednesday, the proposal was rejected and that no discussions will take place.
Bloomberg first reported on Tuesday that Telkom was considering a bid of as much as R13bn for Cell C after the mobile operator missed debt repayments to some lenders. The news wire said investment banks have approached other bidders “with the firepower to take on the deal”, without saying which parties the banks had spoken to.
TechCentral understands that the lenders who have shopped around for other potential suitors for Cell C include Nedbank, the Development Bank of Southern Africa and the Industrial and Commercial Bank of China. — © 2017 NewsCentral Media
