Cell C Turns Down Telkom Offer -Reports
Cell C has reportedly rejected a takeover offer from Telkom, leaving the South African mobile operator clear to pursue a partnership agreement with the larger rival, MTN Group, and also take up a recapitalisation plan with the Buffet Group.
On Friday Telkom said that it had received written communication from the Cell C board rejecting its non-binding proposal. Cell C instead took up a deal with Buffet, a South African investment firm, together with the proposed benefits of a roaming agreement, according to people familiar with the matter.
Telkom said that its board continues to believe that the offer is a compelling proposition that would have created great value for all stakeholders involved, including Telkom’s shareholders.
The former fixed-line monopoly was looking to buy Cell C and combine South Africa’s third-largest telco with its operations to better compete with dominant players MTN and Vodacom Group.
According to Telkom, the proposal would’ve helped Cell C decrease its debt, on which it has already missed numerous payments.
Instead, Cell C has opted to bank on the roaming deal with MTN in order to lower its costs.
Credit: This article originated from www.moneyweb.co.za