Telkom sees no regulatory hurdles for BCX bid

Cape Town - Telkom [JSE:TKG] expects its proposed transaction to buy technology firm Business Connexion [JSE:BCX] (BCX) to be given a nod by the country’s competition watchdog, paving a way for the fixed-line telephone group to delist BCX on the Johannesburg bourse.

Africa’s largest fixed-line telephone group said it will make a filing to the Competition Commission.

“The Competition Commission has an initial review period of 20 (twenty) Business Days, which may be, and routinely is, extended by a further 40 (forty) Business Days,” BCX said in a circular to shareholders on Friday.

“Telkom and BCX do not expect any issues to arise from the filing and anticipate receiving clearance in due course.”

Furthermore, both companies do not expect any issues to arise from the filing of the proposed transaction to regulatory bodies in certain parts of Africa and, said they “anticipate receiving clearance in due course”.

BCX operates in various African countries and both parties will seek approval of the proposed deal in  Tanzania, Namibia, Botswana, the Common Market for Eastern and Southern Africa and any other competition authority they may deem fit.

If the proposed deal is accepted by BCX shareholders and receives various regulatory nods, BCX will be delisted on the JSE around Tuesday November 11 2014.

The JSE has already granted BCX approvals for the termination of its listing, provided the proposed deal becomes unconditional.

The company ordinary shareholders includes Investec Asset Management which owns 14.4% or more than 58 million shares, Allan Gray Investment Council with 58 million shares or an 14.11% stake, Visio Capital Management which holds 56.5 million shares or 13.96% interest, Gadlex with 38.6 million shares representing a 9.53% stake and Mazi Capital which owns 29.6 million shares or a 7.3% shareholding.

BDO Corporate Finance – which has been appointed as an independent adviser to BCX’s board - is of the opinion that the terms and conditions of the offer, based on quantitative considerations, are fair to the BCX shareholders.

In terms of the offer Telkom will acquire, for cash, 100% of the BCX share capital by means of a Scheme of Arrangement at a price per share of R6.60, representing a total cash consideration to BCX shareholders of about R2.7bn.  The company is currently valued at more than R2.5bn.

BCX, which has already made inroads into Botswana, Kenya, Mozambique, Namibia, Nigeria, Tanzania and Zambia, is on prowl for more acquisitions.

Telkom is chasing (BCX to bulk up its information and communications technology business in order to address the technology and communication needs of South African businesses nationally.

On June 12, Telkom and BXC announced that they have agreed to suspend talks following the death of BCX CEO Benjamin Mophatlane.

The Takeover Regulation Panel granted an extension for the posting of the circular relating to the transaction until Friday July 11 2014.

 - Fin24
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