Telkom added R1.5bn to its market value on Monday as market players cheered news that former group CEO Sipho Maseko, together with a group of investors, is making a move to take a large chunk of equity in the telecom operator.
Telkom, which is partially owned by the government, has been the centre of interest from telecom players looking for growth in the SA market.
MTN had expressed interest in acquiring Telkom in July last year, a move that would have propelled it to the status of SA’s largest mobile operator, replacing Vodacom. Soon after, Rain tabled a formal, nonbinding proposal to merge with Telkom. Investment firm Toto Consortium also reportedly made an offer valued at R7bn for a stake in Telkom.
All three proposals have fallen through, but the group’s former boss now appears to be trying his hand at a partial takeover.
Over the weekend, Bloomberg reported that Africa’s largest asset manager, the Public Investment Corporation (PIC), is backing a possible bid led by the former Telkom CEO for a 35% stake in SA’s third-biggest mobile phone company, according to informed sources.
The PIC, which manages more than R2.5-trillion in assets, is in talks to team up with Maseko’s investment vehicle Afrifund and Mauritius-based Axian Telecom in a potential offer for the stake in Telkom, say the sources, who asked not to be identified because the plans are not public. The 35% stake could also be combined with the PIC’s current shareholding to boost the overall holding of the group, they say.
Shares rocketed through trading on Monday to close 10.51% higher at R27.96. That helped the telecom group to partially recover huge losses suffered earlier in the month when the stock fell 15.62%, its biggest one-day percentage decline since late 2020 and a long way from the R100 per share, or R53bn, internal valuation in the same year.
Telkom has so far not commented, saying it is in a closed period and would update the market on June 13 on its strategy to unlock value. The PIC and Axian Telecom have not responded to requests for comment while Maseko also declined to say anything.
The government owns 40% of the group, with a 15% held by its investment arm, the PIC. This rounds off at about 45% being in public hands.
For Maseko and his consortium to take 35%, they may be having discussions with some of Telkom’s other larger shareholders in addition to the PIC. It is also possible that Maseko has been successful in persuading the government to sell its stake in one of the better run of its state-affiliated companies. /With Bloomberg
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