Telkom's three unions have divergent views over its offer to buy Business Connexion (BCX) for R2.7 billion.
Yesterday, Telkom said it would pay a cash amount of R6.60 a share to acquire BCX, valuing the company at R2.67 billion - a 20% premium on its value when initial cautionary statements were issued on 14 April.
Telkom wants BCX to diversify its IT offerings and aid it in returning to financial stability, while BCX believes the telco will boost its African expansion plans.
The news sent BCX stock up 7.38%, to end the day at R6.40, while Telkom's share price lost 1.89%, to close at R37.45, giving it a market capitalisation of R19.5 billion. Telkom is in the midst of a restructuring that could see as many as 650 of its managers retrenched.
Bad news
Communication Workers Union deputy president Clyde Marvin says the deal will be opposed at the Competition Commission, because Telkom is claiming poverty, but has now found R2.67 billion to purchase BCX. He was "flabbergasted" at the news of the deal, because Telkom is not sharing its strategy.
Telkom's bid will have to meet with regulatory approvals, but BCX seems hopeful it will be approved - seven years after a similar bid was quashed. BCX deputy CEO Vanessa Olver has said the landscape has changed dramatically since, and much groundwork has been done already.
South African Communications Union president Michael Hare says its move to acquire BCX sends "mixed messages", because Telkom has said it desperately needs to cut costs. He cannot understand why the company has said it has financial challenges, but has R2.67 billion "spare" to buy BCX.
Telkom's annual results are set to be released next month, which will provide more clarity on its financial situation. The company ended the half-year with cash of around R1.2 billion.
Hare notes that, should Telkom take over BCX, it will boost its staff base by 6 300 at a time when it has said it must cut employee numbers. "It's very confusing."
Telkom has 19 215 staff, of whom 2 635 are categorised as management and specialist employees.
Maybe positive
However, Solidarity spokesman Marius Croucamp says the move could be good for both companies, although the union still does not have a clear picture of Telkom's strategy.
Solidarity says job protection must be offered to BCX staff if the deal goes ahead. He notes Telkom's restructuring will result in a very different company in five years' time.
Telkom does have cash, but its business is ailing, which requires action now, says Croucamp.
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