LONDON (Thomson Financial) - Vodafone Plc. has confirmed its interest in
buying an additional stake in Vodacom from South Africa's Telkom, with the
mobile operator looking to acquire a 12.5 percent stake for 18.75 billion rand,
according to sources.
The South African fixed-line telecoms operator, Telkom, announced earlier in
the day receiving an offer from Vodafone and a separate offer by a consortium
led by Mvelaphanda Group for its entire share capital.
Vodafone noted the cautionary statement from Telkom, but said that "there
are no assurances that such discussions will lead to a transaction being
concluded."
The talks are being resumed after Vodafone originally approached Telkom last
year regarding a possible sale of its 50 percent stake in Vodacom. The deal fell
apart in November after Telkom failed to reach an agreement on the sale of its
fixed-line businses to pan-African mobile operator MTN.
Telkom said that it had received a non-binding proposal from Vodafone, which
owns the other 50 percent of Vodacom, on Friday, after being in discussions with
Vodafone since May 14. However a sale "would be conditional, inter alia, upon
the company unbundling its remaining 37.5 percent shareholding in Vodacom to
Telkom shareholders".
In a separate deal, Telkom said it received an offer from a consortium
comprising Mvelaphanda Holdings, a South African investment and services
company, funds of Och-Ziff Capital Management Group and other strategic
investors for its entire issued share capital. The offer is subject to
conditions including that Telkom will divest its entire 50 percent stake in
Vodacom.
Vodafone confirmed last week at its full-year results that it remains
interested in countries in Asia and Africa.
However, Vodafone CEO Arun Sarin, who is to leave at the end of July, has
not expressed interest in MTN, Africa's largest mobile operator, which is in
merger talks with India's Reliance Communications.
Andre Wills, head of South African analysis firm, Africa Analysis, told
Thomson Financial News that Vodafone's bid to boost its 50 percent stake in
Vodacom is likely to succeed. Telkom needs funds for the expansion of its
operations and infrastructure roll-out to prevent it becoming "squeezed in
financially". Furthermore, Vodafone's success in emerging markets is likely to
boost the operation's overall profitability, thereby bolstering Telkom's
remaining stake.
Vodafone taking management control "will eliminate the dual personality" of
the joint venture, which earns the majority of its revenues from the South
African mobile market.
Shares in Vodafone were down 1.23 percent to 160.30 pence at 12:38 p.m.
lorraine.turner@thomsonreuters.com
lht/jlw
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