In South Africa, Telkom’s largest shareholder (the SA government) is taking a wait-and-see approach before commenting on the proposed takeover from MTN Group.
Recently MTN Group and Telkom confirmed that discussions were underway for the former to take control of the South African telephony group.
Discussions were said to be at an early stage, with Telkom and MTN stating there is no certainty the transaction will be consummated.
It is worth noting that the South African government holds a majority share in Telkom, with a 40 per cent stake in the company.
Speaking about government’s position on the proposed sale, the Department of Communications and Digital Technologies said, “The minister of communications and digital communications, Khumbudzo Ntshavheni, was notified about the non-binding offer by both Telkom and MTN. However, the minister was not provided with any details as the parties have only agreed to initiate discussions.”
“As the largest shareholder of Telkom on behalf of the SA, she will receive details of the possible transaction with other shareholders when the discussions are concluded. If there is a need, she will then inform Cabinet. Telkom is a publicly-listed company, and its board and shareholders must approve its decisions.”
Talks about the potential sale of Telkom have been ongoing over the last couple of years. In 2012, Telkom and Korea-based KT Corporation announced they had agreed on a per-share price for KT’s purchase of a 20 per cent stake in Telkom.
However, the government pulled the plug on the proposed strategic transaction between KT and Telkom. As Cabinet said, it had decided not to support the transaction as proposed.