BCX deal 'unlikely` before year-end

By Nicola Mawson for Telkom
Johannesburg, 11 Aug 2006

SA`s competition authority has received a "fair number" of submissions during its investigation into whether Telkom should be allowed to takeover Business Connexion (BCX).

Competition Commission commissioner Shan Ramburuth says the submissions will be evaluated, and considered in the commission`s recommendation to the Competition Tribunal.

Market commentators do not expect this to happen before the country winds down for the December break, due to the complexity and significance of the acquisition. Ramburuth confirms the commission will receive an extension, as its initial 40 days expires early next week.

He explains extensions are applied for on a 15-day basis, but the commission can apply for several extensions as long as the parties agree to this.

Competition approval is one of the conditions of the merger going ahead. The other is that the Registrar of Companies lodges a certified copy of the High Court`s sanction of the scheme.

The deal was filed with the authority in mid-June and received High Court sanction in the second-last week of June. Liz'el Blignaut, the Competition Commission`s divisional manager of mergers and acquisitions, has previously stated the investigative process could overrun the usual 40 days.

Once the commission has concluded its evaluation, the tribunal will have to consider the acquisition due to the size of the deal. At R9 a share, and a 25c a share dividend, the deal is worth R2.43 billion.

BCX`s shares closed at R8.35 on Thursday, 5c up from Tuesday`s close. Telkom, however, suffered a knock on the back of UK bomb threats and closed at R130.54, down from R132.60 on Tuesday.