JOHANNESBURG - South African telecoms company Telkom SA said on Friday the board of its larger but troubled rival Cell C had rejected its takeover bid.
“The Telkom Board continues to believe the offer is a compelling proposition that would have created significant value for all stakeholders including Telkom’s shareholders,” the statement said. Cell C is majority owned by Blue Label Telecoms.
Telkom said earlier this month that it planned to acquire Cell C on condition that it finalised its restructuring plan that addressed its debt burden, which had ballooned to about R9billion.
This is the third time that the Pretoria-based firm is trying to buy Cell C after the target rather opted for a recapitalization with Blue Label Telecoms Ltd., which owns 45% of Cell C.
A tie-up between Cell C and Telkom’s mobile-phone division would create a business with about 22 million subscribers. That would pose a slightly greater threat to the dominance of South Africa’s two other operators, MTN and Vodacom Group Ltd., which have about 70 million subscribers in the country. Telkom has been investing heavily in fiber and mobile network infrastructure to offset the decline in land-line and voice revenues.
REUTERS / BUSINESS REPORT ONLINE