Telkom SA says 'no thanks' to another acquisition offer

Telkom South Africa's board has rejected an offer from a consortium led by former CEO Sipho Maseko. The consortium aimed to acquire a controlling stake in the operator.

The Johannesburg-listed telecoms operator told shareholders that the board considered the proposal but decided not to continue discussions with the consortium.

"The Board is of the view that the Indicative Proposal is not in the best interest of shareholders and that the current Telkom strategy will yield better value for shareholders," it said.

In June, Telkom issued a cautionary announcement to shareholders confirming it had received an "unsolicited non-binding indicative letter" from the consortium but has now withdrawn the cautionary announcement.

The consortium led by Maseko's Afrifund Investments also includes pan-African group Axian Telecom and South Africa's Government Employees Pension Fund, managed by the Public Investment Corporation (PIC).

Maseko stepped down as Telkom South Africa Group CEO in June 2022 after nine years at the company.

Current Group CEO Serame Taukobong was previously CEO of Telkom Consumer Business and took over as Group CEO Designate in October 2021, working with Maseko for a transition period until Maseko officially left the following year.

Takeover target

At Telkom's full year results presentation last month, Taukobong addressed the recent media speculation over the offer to buy part of the business.

"The board has equally supported us that we do not need a knight in shining armor. Be it my former employee or my former employer. The board remains firm, that the journey that we are taking for the business will deliver the true results for Telkom," the CEO said.

He said at the time that the board had requested further clarity from the consortium on several matters, including the proposed offer price and certainty of funding.

Sipho Maseko stepped down as Telkom South Africa Group CEO in June 2022. (Source: Telkom South Africa).

Telkom SA has waved off a number of takeover attempts lately.

In January 2023, it called off discussions over a possible merger with local operator Rain.

MTN also showed interest in buying Telkom in 2022, but discussions ended.

Telkom is South Africa's third biggest operator with over 15% market share at the end of March 2023, according to statistics from market research company Omdia, a sister company of Connecting Africa.

Vodacom leads in the country with just over 43% market share; MTN is second controlling 30% of the market; and Cell C comes in fourth with 11% market share.

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*Top image is of Telkom South Africa Group CEO Serame Taukobong (Source: Telkom South Africa).

— Paula Gilbert, Editor, Connecting Africa