Business Connexion approves Telkom takeover

Johannesburg - IT outsourcing company Business Connexion (BCX) [JSE:BCX] announced on Monday that its shareholders had voted overwhelmingly in favour of being acquired by Telkom [JSE:TKG].

"The purchase consideration is R6.60 per ordinary share and R6.60 per 'A' share, which represents a premium of 20% over the share price of BCX at close of trading on April 14, 2014," the company said in a statement.

This was the day before the cautionary announcement was issued, with the proposal placing BCX's value at R2.67bn.

A cautionary announcement is a publicly advertised announcement by a listed company to urge shareholders to exercise caution when trading in its shares.

In addition, it was announced on August 8 that BCX would pay a special dividend to shareholders of up to 20 cents per ordinary share prior to the implementation of the proposed acquisition.

The dividend distribution was over and above the R6.60 purchase consideration per share offered by Telkom.

BCX CEO Isaac Mophatlane said working with Telkom would improve the value they offered to customers through integrated, end-to-end, ICT solutions and a more global and competitive offering especially in Africa.

"There are also some synergies between our respective businesses, which will be explored in more detail as we get closer to the completion of the transaction," he said.

The rationale behind the move was in line with BCX's existing convergence strategy, as major technological changes drove the convergence of the IT and the telecommunications industries.

"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," Mophatlane said.

This included various regulatory approvals over the coming months.

Based on the current timeline, the proposed acquisition was expected to be finalised in November 2014.

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