MTN seems confident that its bid to acquire a 59% stake in cellphone and airtime retail distributor iTalk Cellular will be finalised at the Competition Tribunal hearing scheduled for tomorrow morning.
In a statement to ITWeb this morning, the company said: “MTN looks forward to finalising the process.”
The deal has been in the pipeline for some time and was heavily contested by competitor and secondary bidder The Huge Group, which revealed its intention to buy iTalk in November 2007.
Following Huge Group's bid for iTalk Cellular, MTN decided to step in and exercise its pre-emptive rights, and contested the deal. The mobile giant already owns a 14% stake in the business. MTN initially declined a previous offer to purchase more shares in iTalk Cellular, but decided later to challenge the deal with Huge.
The Competition Commission has already approved the merger between iTalk and MTN and has referred the deal to the tribunal. Huge's chairman Anton Potgieter contested the deal and the company asked to sit in on the tribunal hearings, however, the company was declined the right.
At the time, Potgieter said: “We are very disappointed. We felt that we had very viable arguments to add to the deliberations, but the tribunal obviously didn't see it that way. Distribution channels like iTalk are the only way that consumers could get access to lower cellular prices.”
He added that the proposed merger also threatens the existing discounting agreement that is in place through a service provider agreement between MTN and iTalk. However, Huge has not taken its complaints any further.”
In its statement this morning, MTN reiterated: “MTN welcomes the decision made by the Competition Tribunal last month to dismiss with costs the application by Huge for leave to intervene in the proposed merger between MTN and iTalk Cellular.
The company says it is an important step towards MTN's proposed intention of acquiring the 59% interest in iTalk that it does not already own.
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