Consortium in bid to take control of South Africa’s Telkom

A consortium of investors has made a bid to acquire a controlling stake in South African telecom operator Telekom.

The company said that it had received an unsolicited non-binding bid from a consortium led by former Telekom CEO Sipho Maseko’s Afrifund Investments Proprietary Ltd comprising Mauritius-based Axian Telecom and the Government Employees Pension Fund managed by the Public Investment Corporation.

The company said its’ board was considering the merits of the bid and has asked the consortium to provide clarity on the proposed offer price and certainty of funding.

Telkom’s shares have fallen sharply over the past year.

The bid comes as Telkom posted a sharp fall in profits alongside a small increase in revenue for the year to the end of March, and a significant uptick in mobile customers and the reach of its fibre network despite what it characterised as ‘tough trading conditions’.

Group revenue was up 0.9% to ZAR43.1 billion. However EBITDA was down 19.8% to ZAR9.6 billion. The company, which is still largely state-owned, has been hit by inflation, rising costs and power cuts.

Homes passed with fibre were up 23.9%, taking it past one million homes.

Mobile customers were up 7.8% to 18.3 million. Homes connected to fibre grew by 26.7% to reach 492,812.

Telkom has made a number of forays into the TV and media space, most recently with the launch of streaming service TelekomOne in 2020. However, the service was shuttered two years later and replaced with a streaming service from South African pubcaster SABC – SABC+.

SABC had previously partnered with Telkom to launch its streaming offering. Former TelkomOne customers were migrated to the new service.