Telkom South Africa rejects Maseko bid

South African telco Telkom has rejected an offer for control of the company led by its own former CEO.

Telkom rejected the offer led by foerm CEO Sipho Maseko to buy a majority stake after receiving the bid last month.

Current CEO Serame Taukobong had earlier indicated that he was opposed to the bid from the consortium of Maseko’s Afrifund Investments Proprietary Limited, Axian Telecom and the Government Employees Pension Fund, managed by the Public Investment Corporation“The Telkom board of directors (the Board) 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 for shareholders. Accordingly, caution is no longer required to be exercised by shareholders when dealing in their securities,” the company said in a statement.

The bid came 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.