Altech mum on merger challenge

Johannesburg, 26 Jan 2009

ICT group Allied Technologies (Altech) has refused to comment on a weekend report that it is considering legal action against the recently-approved MTN-Verizon merger.

The Business Times reported yesterday that Altech CEO Craig Venter is dissatisfied with the R1.4 billion deal, which was approved by the Competition Tribunal at the beginning of this month.

In the report, Venter expressed concern about a conflict of interest following various industry players, including Altech, being invited to participate in the potential purchase of Verizon SA last year, via public auction.

He noted that the merchant bank that handled that transaction, Macquarie, has a BEE partner in the form of J&J Group, and stated that Macquarie got the mandate to sell Verizon SA last year. Incidentally, Verizon SA`s BEE partner happened to be J&J.

Venter explained that the merger is now under legal review by Altech`s legal team.

This morning, Altech group manager: PR and media Paula Eugenio stated the Business Times interview with Venter was an exclusive and, thus, the company could not comment further. In addition, she said Venter is on leave and not available for comment.

Altech`s behaviour, in reaction to the MTN-Verizon merger, has already raised several eyebrows within industry. Following a hard-fought battle last year for the right to present objections at the merger hearing, the company unexpectedly announced its withdrawal from the matter, a day before the tribunal hearings were set to start.

At the time, sources close to the process revealed that MTN, Verizon and the Competition Tribunal were not impressed with Altech`s last-minute withdrawal, blaming the company for wasting time and money of the merging parties and their legal teams.

However, Altech said, at the time, that it had received a number of general undertakings from MTN, in respect of the way the cellular operator proposed to "conduct the Verizon business".

Following the weekend report about Altech mulling potential legal action against the MTN-Verizon merger, the company would not explain why it did not stick to its guns and participate in the intervention process at the merger hearing. It is also not known whether the alleged conflict of interest, cited by Venter, is the main and sole basis for any potential legal action.