Johannesburg, 10 Aug 2006
SA`s only fixed-line operator, Telkom, has announced a delay of the salient dates with regard to its takeover of Business Connexion.
In a notice to shareholders, Telkom said two conditions of the takeover were not expected to be fulfilled by today. One of the conditions is the logging of the scheme of arrangements with the Register of Companies.
The other condition, said Telkom, was approval from the South African competition authorities. Market commentators do not expect this approval any time soon.
The Competition Commission is investigating the acquisition and, once it has concluded its investigation, the matter will be referred to the Competition Tribunal. Analysts do not expect this to happen before the country winds down for the December break and the commission itself has indicated the process would be a lengthy one.
However, Lulu Letlape, Telkom`s group executive of corporate communications, says Telkom and BCX still expect the final date for completion of all conditions to be met. She explains the original timetable, agreed to by the two companies, will have to be redone, but the companies are confident of wrapping everything up by year-end.
On 20 June, Telkom announced the Witwatersrand High Court had sanctioned the scheme of arrangement. "The order sanctioning the scheme is subject to the competition authorities approving the proposed acquisition in terms of the Competition Act by 15 December 2006, or such later date as may be agreed between BCX and Telkom," it said.
Its original scheme of arrangement, issued to shareholders on 19 May, indicated Telkom expected the deal to be wrapped up by 16 August. This would result in BCX being delisted from the JSE on 29 August.
However, as there are still two conditions outstanding, these dates have been delayed. "Should the conditions precedent be fulfilled, then a further announcement regarding the dates and times of the last day to trade, the suspension date, the record date, the operative date and the delisting date will be released on SENS and published in the South African press in due course," stated the telecoms provider.
Telkom has offered BCX shareholders R9 a share, which was trading at R8.35 by 10:35am on Thursday. This is 0.6% up.
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