JOHANNESBURG May 22 South Africa's Telkom SA
has offered to buy Business Connexion for 2.67
billion rand ($256 million) as it seeks to expand its
information and communication technology services.
Under the transaction, ordinary shareholders will receive
6.60 rand per share, a 20 percent premium over the 5.50 rand the
stock was at before Business Connexion first alerted the market
about a possible deal on April 15.
"A key consideration of our strategy is to grow beyond our
core business of connectivity and expand into end-to-end ICT
services," Telkom Chief Executive Sipho Maseko said in a
statement. "This will form part of the strategy to improve
performance and restore profitability."
Business Connexion, which runs information technology
infrastructure such as data centres, will become a Telkom
subsidiary and delist from Johannesburg's stock exchange if the
deal goes through.
Its shares initially jumped as much as 9 percent on the news
on Thursday, before retracing to 6.9 percent at 6.37 rand by
Those of Telkom dropped 1.3 percent to 37.66 rand, compared
with a 0.6 percent rise by Johannesburg's All-share index
($1 = 10.4174 South African Rand)
(Reporting by Helen Nyambura-Mwaura; Editing by Stella