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Telkom 'not for sale`

Kimberly Guest
By Kimberly Guest, ITWeb contributor
Johannesburg, 31 Mar 2008

Telkom CEO Reuben September says the disposal of Telkom, or any of its investments, will only be considered if "compelling strategic rationale" supports the decision.

Speaking this morning at the company`s analyst briefing day, September said the board was not closing the door to potential suitors, but had a clear idea of the value it sought.

"We have no emotional hang ups that say we cannot dispose of a part of our business. We have considered and subsequently rejected Oger Telecoms` offer, but we would reconsider if they came back with an updated offer," he explained.

As for potential transactions around 50%-held Vodacom, September said the company remained pragmatic about its interest in Vodacom and would compare offers against the "full value" of Vodacom and what benefits such a transaction could deliver on a long-term basis.

"We have also identified a number of attractive alternative opportunities [should Telkom choose to dispose of its Vodacom interest]," he revealed.

Following months of speculation around the eroding relationship between Telkom and its partly owned subsidiary, one analyst at the event questioned September on Vodacom`s strategic value to Telkom "outside of a dividend stream".

"Yes, we are in competing businesses, but that doesn`t mean that Telkom looks at Vodacom and relies on dividend flow alone. We are not just looking for opportunities in the domestic space, the total opportunity for Telkom around Vodacom also lies beyond our borders," responded September.

Analysts also established that Vodafone does not have pre-emptive rights to acquire Telkom`s shareholding in Vodacom should the fixed-line giant be sold. This means a prospective bidder could take Telkom and the 50% Vodacom interest in a purchase.

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