Telkom’s proposed acquisition of Business Connexion (BCX) — its second attempt to buy the listed IT services company — will create an information and communications technology (ICT) company that will “address the technology and communications needs of South African businesses nationally”.

That’s according to the telecommunications operator’s CEO, Sipho Maseko, who says the deal will help Telkom grow beyond its core business of connectivity and expand into end-to-end ICT services.

“This will form part of the strategy to improve performance and restore profitability [at Telkom],” Maseko says in a statement.

“Telkom believes that its offer represents substantial value to BCX shareholders [and] is fully funded and a full detailed due diligence was undertaken and completed.”

Telkom says the offer is in the “best interests” of BCX and its shareholders, as well as the “long-term telecoms interests of South Africa and the African continent”.

Should the deal go through — and that’s far from clear given that the competition authorities forced Telkom to back away from a 2007 offer to buy BCX — the IT company will become a wholly owned subsidiary of Telkom and its listing on the JSE will be terminated.

Telkom is offering BCX shareholders R2,7bn in cash. The offer represents a premium of 22% to the volume weighted average share price of R5,38 for the 60 trading days prior to BCX’s cautionary announcement to shareholders on 15 April.

“Telkom intends to strengthen and seek growth opportunities for its South African operations and to support the expansion of BCX’s current footprint on the African continent,” the company says.

It says the proposed acquisition is “in line with the global trend of IT and telecoms convergence”.

“This convergence trend has seen many traditional IT companies merge with telecoms companies and is fundamental to the strategies of trailblazing companies such as Google, Apple and Amazon.”