Telkom CEO says door still open for Maseko deal

Telkom CEO Serame Taukobong has clarified that the offer from the company’s former CEO, Sipho Maseko, to buy Telkom has not been rejected.

On 12 June, Telkom announced that it had received a bid for a 35% stake from a group of investors, including the telecommunications giant’s former CEO.

The consortium comprises Maseko’s Afrifund, Axian Telecom, and the Government Employee Pension Fund managed by the Public Investment Corp.

The consortium sent Telkom an unsolicited, non-binding indicative letter for the acquisition of a controlling stake in the operator. An independent board is now assessing it.

Business Times reported that the Maseko consortium offered R46 a share for a controlling stake in Telkom. 

However, in 2020, Maseko told investors Telkom was worth R53 billion, equating to a share price of R108.

Taukobong recently said the company is worth over R60 per share, and any suitors should see that as a benchmark before making an offer. The Maseko consortium’s offer was, therefore, rejected as too low.

At Telkom’s annual results presentation, Taukobong also said the company is open to proposals but does not need rescuing from MTN or former CEO Sipho Maseko’s consortium.

However, Taukobong told Newzroom Afrika that the Maseko Consortium’s offer was not rejected. Rather, the board has required “more points of clarity around the fundamentals of the deal”, and Telkom is waiting for those responses.

He said it is important for the company not to get tied down for the next four or five years with competition issues and be unable to exercise its value creation.

Taukobong said Telkom is looking to potentially sell its towers and partner with someone in its fibre business and does not want these projects to be stopped by unsolicited bids.

In 2022, MTN entered into discussions to buy Telkom in return for shares or a combination of cash and shares.

The announcement was well-received by investors, with Telkom’s share price jumping 30% and MTN’s stock price increasing 5% on the news.

However, Rain entered the fray with a competing proposal. It wanted Telkom to buy Rain for newly issued shares in Telkom.

This muddied the waters as Telkom couldn’t assure MTN that talks were exclusive, which resulted in MTN walking away from the deal.

However, Taukobong said the “door is still open” for MTN, as there is “obviously a natural consolidation in the country”.

Regardless of which offers are on the table, he said, “The key thing for me is to focus on our job. We’ve got a business to turn around, and we will not be distracted.”

“The key thing for us is, ‘How do we make sure the numbers we delivered this year significantly improve?’ and that’s the big focus for us.”