By Gugu Lourie
The approval of Telkom’s R2.7 billion proposed deal to buy JSE-listed technology firm Business Connexion (BCX) is at an “advance stage”, says the country’s competition watchdog.
Last year, BCX shareholders overwhelmingly voted in favour of Telkom’s R6.60 per share offer to take over the fast-growing technology company. This pave the way for the regulators to review the proposed transaction.
Telkom, the country’s fixed-line telephone group, is offering BCX shareholders R6,60 per share to buy 100% of BCX.
The deal has already been given a nod by four regional watchdogs – the Namibian Competition Commission, Tanzania Fair Competition Commission, Competition Authority of Botswana, and the Common Market for Eastern and Southern Africa.
The transaction is still awaiting approval from South Africa’s regulators – Competition Authorities; the Independent Communication Authority of SA (ICASA) and the issue of a compliance certificate by the Takeover Regulation Panel.
Mava Scott, spokesperson of the Competition Commission, said the regulator’s team is at an advanced stage in the investigation of the merger.
Asked to provide timelines of the approval process, Scott said: “Unfortunately, due to the complexity of the issues in the telecoms market generally – we cannot guarantee a specific time-frame in terms of conclusion of the investigation.”
He added: “We can only assure the public that we are far advanced in the investigation and we hope to finalize it soon.”
Telkom is chasing BCX to bulk up its information and communications technology business in order to address the technology and communication needs of South African businesses nationally.
BCX has operations in Botswana, Kenya, Namibia, Nigeria, Mozambique, South Africa, Tanzania and Zambia.
It is a leading IT service provider in South Africa, provides strong presence in East Africa and has an established presence in West Africa, which it continues to grow through aggressive acquisitions.
BCX is also the largest employer of ICT skills in Africa with close to 7 000 employees, who have vast experience in delivering large projects on the continent.
Telkom will reverse integrate Cybernest into BCX once the transaction to buy the technology group is completed,
creating a formidable standalone business.
The Telkom deal has so far cost BCX about R7.7m.
Cybernest, which was founded in 2009, has six fully-fledged data centres, with close to 600 specialised data staff, managing in excess of R2.5bn worth of IT assets. It operates 9 700m2 of data centre space.
In the 2014 financial year, Cybernest generated R347m in revenues, reflecting a 69% rise compared to the same period last year.
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