Telkom on Tuesday rubbished talk among some JSE traders that it is planning a hostile bid for Cell C.
Speculation started to swirl on Monday afternoon that the company was looking to buy up Cell C’s debt and that this was a precursor to some sort of hostile takeover attempt.
A Telkom spokeswoman on Monday said emphatically that there is no hostile offer being planned for the deeply indebted mobile operator.
The speculation may have its roots in a recent meeting Telkom had with a financial adviser to Cell C lenders.
“Telkom has made an offer to acquire 100% of Cell C shares,” the spokeswoman said. “Telkom met with the lenders’ financial adviser, at the adviser’s request, to discuss Telkom’s offer.”
She added that Telkom “believes it has made a compelling offer that is beneficial to all stakeholders”.
The latest speculation comes a day after MTN and Cell C said they had signed an expanded roaming agreement that would greatly deepen cooperation between the two operators. The agreement could complicate Telkom’s bid for Cell C, with some analysts warning Telkom may have to pay more.
The new “long-form roaming and services agreement” will allow Cell C to roam on MTN’s network in all areas of South Africa. Previously, it only had access to MTN’s network in selected parts of the country. The deal, which will take up to 36 months to implement, will allow Cell C to cut the capital outlay on its access network and should help it improve its precarious financial position.
Locked in talks
Responding to the news of the new roaming deal, Telkom said on Monday that it expects the “parties involved” will have considered the deal “in the context of the discussions” with it.
“Telkom notes the decision between Cell C and MTN to conclude a roaming agreement which remains subject to conditions,” it said.
Cell C, meanwhile, remains locked in talks regarding a planned recapitalisation involving the Buffet Consortium and other investors. It still hopes to have that deal concluded by year-end. — © 2019 NewsCentral Media