The implementation agreement will however exclude the [DATA BCX:Business Connexion] (BCX) ordinary shares held by Business Connexion Proprietary Limited as treasury shares and the entire issued ‘A’ ordinary share capital of BCX.
“Since April 2013, Telkom has embarked on a strategy to improve performance and one of the key considerations in respect of this strategy is to grow beyond its core business of connectivity by expanding into ICT services,” said BCX and Telkom in a joint announcement.
(READ MORE: Business Connexion’s HEPS drop due to sale of Qlink)
“BCX is a significant player in the South African ICT services market and the proposed transaction will enable Telkom to expand its existing offerings whilst, at the same time, providing scale in IT services, which will help reinforce Telkom’s core connectivity business and enhance Telkom’s convergence strategy.”
The companies added that the proposed transaction would address the technology and telecommunications needs of South African companies, both within their domestic markets and as they expand into other Africa countries and beyond the continent.
In terms of the ordinary scheme, [DATA TKG:Telkom] intends to pay a cash consideration of 6.60 rand per ordinary scheme share to the ordinary shareholders.
Telkom also intends to terminate the listing of the BCX ordinary shares on the main board of the Johannesburg Stock Exchange (JSE) should the proposed transaction be implemented.
(READ MORE: Telkom reports positive results, declining fixed voice business a worry)
“Telkom’s offer is fully-funded and a full detailed due diligence was undertaken and completed. As major global technological changes are driving convergence of the information technology and telecommunications industries, the proposed transaction will advance the convergence strategies of both Telkom and BCX,” they said.
“Telkom has a strong commitment to social development and ongoing transformation goals, including Broad-Based Black Economic Empowerment and the ICT Charter and also supports the South African government’s objectives and policies regarding transformation in the ICT sector.”