Analyst urges Telkom to accept Vodafone’s R22.5 billion offer

ANALYSTS believe South African based landline services provider Telkom should accept Vodafone’s R22.5 billion bid to acquire a 15 percent stake in Vodacom.

“This is an adequate control premium, and Telkom should accept it with alacrity,” said leading market watcher Bulls& Bears.
The proposal is based on Telkom’s unbundling its 35 percent stake and listing on the Johannesburg Stock exchange.

“Apart from other possible synergies, this would give more critical mass to Vodacom’s recent $700m purchase of Gateway, which provides connections between African networks,” Bulls&Bears said.

However, the company said, “A key issue for Telkom shareholders is whether they will receive the R21.7 billion n in cash or whether the directors accelerate Telkom’s own plans. Let us hope that, with other tax revenues plummeting, government encourages a full payout, so as to receive the R8.5 billion in its 39 percent stake would entitle it to.”

Vodafone has stakes in mobile network operators in Ghana, Kenya and Egypt-

ITNewsAfrica.com, Johannesburg