Telkom Ends Talks to Buy Mobile Phone Company Cell C Over Priceby
South African landline provider fails to agree deal with Oger
Shares gain 8% in Johannesburg after takeover talks abandoned
Telkom SA SOC Ltd. abandoned talks to buy mobile-phone company Cell C Pty Ltd. after the South African landline provider failed to agree to a price with the majority owner, Oger Telecom Ltd.
“It has become clear that there is a difference between the parties on the assessment of value of the proposed transaction,” spokeswoman Jacqui O’Sullivan said by e-mail on Thursday. “As no agreement has been reached, Telkom and Oger Telecom today agreed to end all discussions.”
Telkom shares gained 8 percent to 66.40 rand as of 4:17 p.m. in Johannesburg, valuing the Pretoria-based company at 35 billion rand ($2.5 billion). The stock has fallen 4.6 percent this year, compared with a 4.7 percent gain on the FTSE/JSE Africa All-Share Index.
Telkom, 40 percent owned by the South African government, was in talks with Dubai-based Oger to buy closely held Cell C as it sought to expand its mobile-phone unit to offset a decline in landline usage in Africa’s most industrialized economy. Chief Executive Officer Sipho Maseko said on Monday that due diligence was “going reasonably well,” and that the process would probably be finished early next year.
Cell C is South Africa’s third-largest mobile phone company with 22 million customers. Telkom’s wireless unit is the country’s fourth biggest.