Business Connexion's share price rose 13% yesterday to R5.30 in mid-afternoon trade after an announcement that a division was in negotiations.
The cautionary notified shareholders that subsidiary Business Connexion Communications was in discussions that could materially affect the price of the group's securities.
One analyst, who cannot be named, speculated the share price rise was based on hopes the group was looking to sell the underperforming division.
"There have been rumours for a while that Neotel and/or Altech may be interested in acquiring this division. Vodacom is also still looking for acquisitions on that side of the market. It's not a stretch for some investors to hope that this cautionary is related to such a deal," he says.
Business Connexion CEO Benjamin Mophatlane would not reveal whether the division was on the buy or sell side of the talks. However, he revealed the other party was an established market player.
"These discussions are part of our revitalisation programme. It's been part of our plan all along. More than that I cannot say," he said.
The company's results for the six months to 30 November reveal this division made a R6.8 million loss. In the previous interim period, Business Connexion Communications made a R7 million loss, closing the full year at a R24.3 million operating loss.
Business Connexion closed at R5.20 per share.
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