Johannesburg - Telkom has offered to buy Business Connexion for 2.67 billion rand as it seeks to expand its information and communication technology services.
Under the transaction, ordinary shareholders will receive 6.60 rand per share, a 20 percent premium over the 5.50 rand the stock was at before Business Connexion first alerted the market about a possible deal on April 15.
“A key consideration of our strategy is to grow beyond our core business of connectivity and expand into end-to-end ICT services,” Telkom chief executive Sipho Maseko said in a statement.
“This will form part of the strategy to improve performance and restore profitability.”
Business Connexion, which runs information technology infrastructure such as data centres, will become a Telkom subsidiary and delist from Johannesburg's stock exchange if the deal goes through.
Its shares initially jumped as much as 9 percent on the news on Thursday, before retracing to 6.9 percent at 6.37 rand by 09:57 SA time.
Those of Telkom dropped 1.3 percent to 37.66 rand, compared with a 0.6 percent rise by Johannesburg's All-share index. - Reuters