Shares in JSE-listed Reunert gained almost 2% yesterday, after it said its subsidiary Nashua Mobile was selling its subscriber base to MTN and Vodacom.
The move will eventually lead to Nashua Mobile closing down, leaving Altech Autopage as the only contender in the independent mobile solution space.
Stock in Reunert gained 1.9%, to close the day at R68.50, as the share price lifted 128c, beating the JSE's all share index, which improved 0.38%.
Reunert made the surprise announcement yesterday, citing factors such the expiry of the service agreement between Nashua Mobile and Vodacom, and the expiry of the incentive deal with MTN.
Vodacom did not fare so well on the news, dropping 0.8% - or 110c - to end the day at R136.40, while MTN lost 0.23% to close at R218.49.
Reunert will receive a total of R2.26 billion - before VAT - for its around 950 000 subscribers, which will now be supported by the mobile duopoly, it said. Reunert is also in talks with an unnamed third party to sell its Cell C base.
Wise move
Vestact analyst Sasha Naryshkine notes the news was the "best" he had heard all day and that Reunert's gain is equivalent to around 20% of its market capitalisation. Reunert is currently worth around R12.8 billion.
"MTN and Vodacom were starting to squeeze Reunert and while this may have been a very lucrative business in the past, it is becoming less so. So it makes sense for Reunert to eject these businesses back to their respective service providers.
"And there are indications that bad debts have been a problem, because this is essentially a consumer business. And with Reunert having no sharing of the cream as before, the milk has essentially been watered down to fat-free."
Naryshkine adds it will be interesting to see how the rest of the Nashua business - Nashua Office Automation, Nashua Communications, Pansolutions and Quince - contributes to its top line.
For now, Reunert is focusing on maintaining service levels, migrating customers seamlessly and limiting the impact on staff, says Mark Taylor, Nashua Mobile CEO. The unit has 601 staff and has started negotiations.
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