Telkom shares jumped after after acquisition talks with Dubai-based Oger Telecom to buy its stake in Cell C collapsed on Thursday, ending concern the local firm would overpay to bulk up its mobile phone assets. By Staff Writer
Telkom said on Thursday talks to buy Cell C collapsed after not reaching an agreement with Oger Telecom on how to value Cell C.
By “mutual agreement” Telkom and Oger Telecoms said they have ended all discussions related to the potential purchase of Cell C by Telkom.
“Through Telkom’s engagement with Oger Telecoms in relation to Cell C, it has become clear that there is a difference between the parties on the assessment of value of the proposed transaction. As no agreement has been reached, Telkom and Oger Telecoms today agreed to end all discussions,” said Telkom in a statement.
Telkom shares gained 9.96% at R67.58 giving the telco a market value of more than R34 billion.
The investors are really cheering the management’s decision to walk away from the deal after conducting a due diligence.
Market talk has suggested that Oger Telecom was asking a R20 billion price tag on Cell C.
Now Telkom will need to focus on building its mobile unit and maybe it could revive talks with MTN over network sharing deal that collapsed in August.