Former Telkom CEO Sipho Maseko has confirmed that he and his partners are walking away from their proposal to acquire a 35% of the partially state-owned telecommunications company, Sunday Times reports.
The consortium comprises Maseko’s Afrifund, Axian Telecom and the Government Employees Pension Fund, managed by the Public Investment Corporation (PIC).
If the proposal had been successful, Maseko said he would have added PIC’s share in Telkom to the mix, bringing the consortium’s holding to 51%.
However, it appears the deal is now definitely off the table.
“We are definitely walking away. The board has made it clear that they are not willing to engage with us at all,” Sunday Times quoted Maseko as saying.
He explained that the consortium hadn’t been given a proper opportunity to present its proposal to the board, which he believes would have helped it understand the strategy.
Maseko’s consortium initially offered R46 a share for a controlling stake in Telkom. Still, Maseko said it would have reconsidered its bid if it was given a hearing by the Telkom board.
“We would be in alignment with strategy and plans for the company,” he stated.
Telkom CEO Serame Taukobong said the company is worth over R60 per share, and any suitors should see that as a benchmark before making an offer.
Maseko himself had previously said Telkom was worth R108 per share.
On 7 July 2023, Telkom revealed that it had terminated talks with the consortium regarding the proposal.
“The Telkom board of directors, having considered the indicative proposal, has decided not to continue discussions with the consortium, as 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,” it said.
However, Maseko said the dismissal was due to shareholders being unable to decide whether the deal they put on the table would benefit them or not.
Taukobong said no due diligence was done.
“It is the board’s view that the indicative proposal is not in the best interest of shareholders and that the current strategy will yield better value for shareholders,” Telkom said.
A spokesperson for the consortium said the offer was fair and the value creation strategy was sound.
They said the deal would have resulted in Telkom becoming a pan-African telecommunications giant with a sustainable financial framework for the future.
“Apart from an informal meeting with the CEO and chairman, we have not had the opportunity to address the board on the merits of our offer,” stated the consortium.
“We have therefore been denied the opportunity to explain the price’s rationale and negotiate price and terms with the Telkom Board.”
The consortium launched its bid to acquire a controlling stake in Telkom in May 2023.