Telkom offers to buy Business Connexion for R6.60 per share

Embattled listed telecommunications company Telkom has made a bid worth R2.6bn to take over listed information and communication technology company Business Connexion (BCX)‚ which generates in excess of R6bn a year in revenue.

By Samuel Mungadze

23 May 2014

BCX's Chief Executive Benjamin Mophatlane says the deal makes sense because of the convergence in the telecommunications sector. Image: Micosoft

In a statement to shareholders Telkom said it intended to implement the offer by way of schemes of arrangement.

The price is R6.60 per ordinary share and R6.60 per "A" share‚ which represents a premium of 20% on the share price of BCX at close of trading on 14 April 14‚ when a cautionary announcement was issued. The offer values BCX at R2.67bn.

The under-pressure fixed-line operator said the deal would‚ among other things‚ help reinforce Telkom's core connectivity business and enhance its convergence strategy.

BCX has an existing convergence strategy‚ and Telkom believes there is sound rationale for the offer to be considered‚ as major global technological changes are driving the convergence of the information technology and telecommunications sectors.

Business Connexion's Chief Executive Benjamin Mophatlane said the merger would advance BCX's convergence strategy and present new and exciting opportunities for staff in the greater combined entity.

"There are clear opportunities that exist between our respective companies. The dynamics of the global ICT industry are changing particularly with the evolution and convergence of technologies that have blurred the lines that once separated telecommunications companies from the world of information technology‚" he said.

Both BCX and Telkom believe that a merger would enhance their global attractiveness‚ particularly on the African continent.

Source: I-Net Bridge

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