Vodafone Confirms Increasing Vodacom Investment - Takes 65% Stake
Vodafone has confirmed a comment from Telkom South Africa that it has made a non-binding proposal to acquire a 15% stake in their jointly owned mobile subsidiary, Vodacom. The company has offered ZAR 22.5 billion (US$2.47 billion) less the attributable net debt of Vodacom at the date of signing subject to, inter alia, the listing and unbundling of Telkom's remaining stake of 35% in Vodacom to Telkom shareholders.
The Proposed Transaction would result in Vodafone owning 65% of the company - which has mobile networks in South Africa, Democratic Republic of Congo, Lesotho, Mozambique and Tanzania.
The execution of the Proposed Transaction remains subject to a number of conditions, including the successful negotiation and agreement of final transaction documents. The board of directors of Telkom said that they are supportive of the Proposed Transaction. The South African Government is also supportive of the Proposed Transaction subject to finalising the transaction agreements.
The state is the largest shareholder in Telkom, with a 38.9% stake. Government-owned Public Investment Corp. holds a 15.3% stake, and the Elephant Consortium, which has links to the ruling African National Congress, owns a further 5.7%.
Telkom has been reviewing its mobile operations for more than a year, and at varying times has said it would be open to disposal, takeover or joint venture. Last November said it had broken off talks to sell its fixed-line operations to South Africa's MTN Group and an interest in Vodacom to Vodafone.
In June, Telkom was approached by a consortium of Mvela Holdings, Och-Ziff and other strategic investors interested in buying Telkom, but without its stake in Vodacom, but the talks broke down last month.
Posted to the site on 9th October 2008
