Vox Telecom has decided to end talks with various parties with a view to changing ownership because the board believes it would be "crazy" to sell.
CEO Jacques du Toit says the decision was taken after the company spent many months in talks and planning around selling - a process that took much longer than expected - and the board eventually came to the conclusion that it would be "crazy".
Du Toit explains this was because its future plans indicated the board could add more value to the company than what would be gained by selling. Vox opened itself up to potential new partners in July last year, and entered into negotiations last September.
At the time, Du Toit said this move was in a bid to accelerate growth when the sector was coming under increasing deflationary pressure, and consolidation was picking up pace. The discussions followed its previous consolidation of its brands, which meant it was able to explore opportunities.
He says the shareholders - Investec, Rand Merchant Bank and Lereko Metier Capital - took a look at the convergence happening within the sector and decided to open up Vox to a partnership. "If you don't do something, you will end up in a tight spot."
Vox received a R499 million offer from its current shareholders - Investec, Rand Merchant Bank and Lereko Metier Capital - in the middle of 2011, and left the bourse towards the end of that year. At the time, it explained it would be better able to focus on its strategy without being encumbered by listing requirements.
The group added its share price had performed poorly, limiting its ability to conclude deals, removing value from employee share incentive schemes, and negatively affecting employee morale.
Du Toit says, as a result of the sale negotiations, the business had gone into takeover mode. "The business does stop a bit; it goes into neutral mode."
Since the news was announced to staff last night, morale has improved and there is more energy, Du Toit adds. He says its growth plans include bulking up its sales staff from 150 to 250 in the next three years, and boosting its product range.
Du Toit would not disclose what numbers were being bandied around, nor specific companies Vox was in talks with, other than to note they were "industry players". He adds it may enter new talks - to be bought out or to be a buyer - in the future.
Share