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Blue Label talks come to an end

Staff Writer
By Staff Writer, ITWeb
Johannesburg, 12 Dec 2014
Blue Label joint-CEO Brett Levy owns 10.78% of the company.
Blue Label joint-CEO Brett Levy owns 10.78% of the company.

Blue Label Telecom has called off talks with an unnamed third party after buyout talks failed to progress significantly.

The company received the buyout bid at the beginning of October, and noted - at the time - that it was a "non-binding expression of interest". It now says not enough progress has been made for it to remain under cautionary.

Blue Label has also "terminated" its engagement with the third party, which had been keen to buy all its issued shares. Although no price was ever disclosed, Blue Label is currently worth R5.8 billion, and any offer would likely give shareholders a premium.

When the offer was made, it had a market capitalisation of R6.6 billion. Large stakes in the company are held by institutional investors as well as the two CEOs. As of May, Allan Gray had a 20.42% stake, while Shotput Investments owned 15.23%. Joint-CEO Brett Levy owns 10.78%, while his brother Mark - also joint-CEO - holds 9.81%.

The listed company had cautioned the non-binding talks may not lead to an offer. A month ago, it renewed its cautionary, noting discussions were still ongoing.

In the year to May, the listed company grew revenue 2% to R19.4 billion - from R19 billion - and said its investment in its local distribution channels crimped its margin growth in SA. Blue Label recently made a handful of purchases and disposed of non-core entities.

Spokesman Michael Campbell notes the company has been in play a number of times in the past few years and remains alert to opportunities.

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