Business Connexion (BCX) shareholders this morning voted in favour of a bid by Telkom to take the company private in a R2.67 billion deal.
As a result, the offer now only needs the sanction of regulatory authorities, such as the Competition Tribunal and the Independent Communications Authority of SA (ICASA) before BCX is delisted in November.
Telkom is bidding a cash amount of R6.60 a share to buy out BCX, valuing the company at R2.67 billion - a 20% premium on its value when initial cautionary statements were issued on 14 April. The listed IT entity is now trading at R6.43.
On Friday, BCX said it would pay a special dividend to shareholders of up to 20c per ordinary share before the deal goes through.
Telkom's bid, the second time it has made such a move, was initiated in May. Eight years ago, it offered to buy BCX in a deal that was quashed by the Competition Tribunal.
This time, however, both companies are more optimistic the bid will be allowed to go ahead, because the ICT landscape has changed. Telcos buying IT companies has become a global trend.
BCX CEO Isaac Mophatlane says, on the back of the approval, that the company will have a "greater ability to provide integrated end-to-end ICT solutions and a more global and competitive offering, particularly on the African continent".
Mophatlane, brother of deceased Ben - who co-founded BCX along with Isaac - adds there are also some synergies between the businesses, which will be explored in more detail as it gets closer to the completion of the transaction.
"This is a key milestone in the proposed transaction process and we will now work together with Telkom on a number of conditions which remain to be fulfilled for this deal to happen, including various regulatory approvals over the coming months," Mophatlane adds.
CEO Sipho Maseko has said the deal will give Telkom scale to expand into IT services and help reinforce its core connectivity business. "Telkom believes this combination will create a leading ICT company in SA, with unrivalled capabilities throughout the country."
BCX is set to be a standalone entity within Telkom.
Share