Last Friday, MTN Group Limited made public their intention to exercise their pre-emptive right to acquire the balance of the 59% of the shares held by the Bebinchand Seevnarayan Trust in iTalk Cellular (Proprietary) Limited.
The actual status of the transaction concluded between the Huge Group and the Bebinchand Seevnarayan Trust in relation to iTalk requires further elaboration: Huge Group has not abandoned its own transaction related to iTalk.
In order to avoid any doubt in this regard the Huge Group released a SENS announcement to the JSE Limited: this announcement was released late on Friday afternoon, 27 June 2008. In this announcement the Huge Group confirmed that it is aware that MTN has exercised its pre-emptive rights in respect of iTalk; it was further confirmed that the transaction between the Huge Group and the Bebinchand Seevnarayan Trust remains in full force and effect but is subject to certain waivers and approvals from MTN, which waivers and approvals MTN are not prepared to provide at this point in time.
The transaction between MTN and the Bebinchand Seevnarayan Trust is subject to unconditional approval by the Competition Tribunal. The Competition Commission will investigate the transaction between MTN and iTalk to ensure that this transaction does not "substantially lessen competition" in the South African mobile telecommunications industry. It will then make a recommendation to the Competition Tribunal who will make a judgement in respect of this case.
The Huge Group would not oppose the transaction between MTN and iTalk if it felt that its opposition was without merit: in this regard the Huge Group is of the view that its case has substantial merit and the Huge Group remains confident about its position.
In the event that the transaction between MTN and iTalk does not receive the unconditional approval of the Competition Tribunal then the Huge Group will proceed with the conclusion of its transaction with the Bebinchand Seevnarayan Trust in relation to the acquisition by the Huge Group of a controlling interest in iTalk.
For now it is business as usual: all that this means is that the Huge Group will effectively have one further hoop to jump through in its effort to acquire a controlling interest in iTalk, the statement concluded.
