Cell C rejects Telkom offer of R13bn to buy company
CELL C has rejected a bid from Telkom, which had reportedly offered R13 billion to buy the debt-laden cellular company.
In a statement, the chairman of SA’s third mobile operator, Mohammed Hariri, said Cell C was already involved in a deal with Blue Label.
Under the Blue Label agreement, which dates back to October, the prepaid service provider will pay R5.5bn for a 45 percent stake in Cell C.
That deal is part of Cell C’s efforts to pay down debts which last year forced it into a restructuring with bondholders involving a three-year maturity extension to July 2018.
Cell C, founded in 2001 by Saudi Arabia’s Oger Telecom, has struggled to compete against established players Vodacom and MTN Group.
Following Blue Label’s deal, Cell C would also issue new shares to staff, senior management and existing shareholders to help reduce borrowings to a maximum of R8bn, said Blue Label at the time.
Separately, Net1 UEPS Technologies said it had entered into an agreement with Blue Label to subscribe for about 117.9 million shares for R2bn.
Net1 would own about 15 percent of Blue Label and expected to settle the transaction through a combination of cash, debt, plus an equity issuance of five million shares, the company said.
Last week, Bloomberg reported Telkom was looking at a bid worth as much as $1bn for Cell C.
Blue Label’s deal has an end-February deadline.
Telkom, 39 percent owned by the government, held talks with Cell C’s owner, Oger Telecom, in 2015 about buying Cell C but failed to agree on a price.
Telkom has been restructuring and streamlining its operations in a bid to counter falling demand for fixed phone lines. – Business online editor, go to www.busrep.co.za