South Africa’s Telkom on Monday revealed that it is holding talks with Cell C that could lead to it acquiring 100% of the mobile operator.
In a stock exchange announcement the South African incumbent said it is "currently performing due diligence on Cell C."
Speculation over such a deal mounted earlier this year and in September Telkom issued a statement admitting that it was in discussions that could affect its securities price. It did not name the other party though.
At the time, Bloomberg quoted unnamed sources as saying that Telkom was working on an 18 billion rand (€1.17 billion at Monday’s exchange rate) offer for Cell C, which was some way below the operator’s ZAR22 billion asking price.
Telkom did not comment on the price of the deal under discussion, nor did it provide any further details.
It advised shareholders to "exercise caution" with regard to any information circulating about the deal that has not come directly from Telkom.
The acquisition of Cell C, should it go ahead, would give Telkom a real position in South Africa’s mobile market. As it stands, the incumbent’s mobile arm is the smallest player in the market by some margin, claiming a share of just a few percent.
Cell C is the third largest mobile operator in the country, behind Vodacom and MTN.
