Telkom, which is set to release its annual results on Friday, anticipates its R2.67 billion purchase of Business Connexion (BCX) will aid its earnings per share.
The telco says earnings per share should gain about 3.8% once the deal is concluded, while headline earnings per share will drop a percent. However, this is based on the assumption that the deal had been completed on 1 April.
For the year to March, Telkom expects basic earnings per share from continuing operations to come in at between 2 972 and 3 428 cents higher than those of last year, while headline earnings per share from continuing operations are expected to be between 772 to 789 cents higher.
Telkom's bid - the second time it has made a play for BCX - still has to be approved by regulatory authorities, such as the Competition Tribunal.
Seven years ago, the tribunal ruled against Telkom's first attempt because it was concerned the merger would hamper downstream competition.
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.
In a statement to shareholders, Telkom said costs associated with the deal should be around R30 million.
BCX shareholders will meet in the middle of next month to vote on Telkom's cash offer of R6.60 a share. BCX's stock is currently trading at R6.10, while Telkom continues its gains and is now at R41.63.
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