According to recent reports, Telkom has warned shareholders that it is in discussions which may have an effect on its share price.
While Telkom did not elaborate on the nature of the discussions, it has been speculated that Telkom is looking at the possibility of acquiring South Africa’s third largest mobile operator, Cell C.
The cautionary announcement came days after Cell C CEO, Jose Dos Santos, said the mobile operator had held discussions with Telkom about a possible deal. Nothing material has come of the discussions, however, Dos Santos said.
According to Dos Santos, Cell C has increased its market share to almost 22 million customers and has been making a month-on-month profit for several quarters.
A recent Bloomberg report indicated that Cell C was valued at R22 billion by its owners, but reported that Telkom is not prepared to pay more than R18 billion. Dubai-based Oger Telecom, who owns 75% of Cell C shares, noted in March 2015 that it was looking to sell its stake in Cell C.
Last month Oger Telecom’s chief legal officer and deputy CEO, Mazen Abou Chakra, said that six different groups had approached them with interest in acquiring their stake in Cell C, but no decision had been made on the matter.