Vodacom-Neotel details “weeks away”

·21 Feb 2014

Neotel CEO Sunil Joshi said that information on whether the planned deal between Vodacom and Neotel will happen should be forthcoming within weeks.

On 30 September 2013 Vodacom and Neotel confirmed that they have entered into exclusive discussions regarding a potential acquisition of 100 percent of the shares of Neotel by Vodacom South Africa.

At the time Vodacom CEO Shameel Joosub said that the finalisation of the transaction is subject to the successful conclusion of commercial negotiations and receiving the requisite regulatory and corporate approvals.

Negotiations between the two companies are ongoing, and it is understood that Vodacom is in an advanced stage of its due diligence process.

Joshi told MyBroadband that the December-January holiday impacted the negotiations, but that good progress has been made.

According to information received by MyBroadband there is a currently dispute about price, but Joshi would not be drawn into discussions about this.

He said that it is currently too early to comment on the likelihood of a successful deal. However, more guidance on this should emerge within the next few weeks.

One of Neotel’s most valuable assets, especially to Vodacom, is its spectrum. There has been a debate on whether Vodacom’s acquisition of Neotel will automatically give Vodacom access to this spectrum.

Joshi said that this issue will be handled when the time comes, but he is confident that South Africa’s regulatory structures are mature enough to make the right decision.

The Neotel CEO also said it will be premature for him to say whether he will stay at the company if Vodacom acquires Neotel.

Joshi added that this decision, if a deal is struck, will be based on what the board and the company’s shareholders require.

In Vodacom’s recent Q3 trading update, Joosub told investors that the negotiations are at an advanced stage, and in the coming weeks they would be able to finalise these negotiations.

Vodacom said that it cannot comment on the content of the negotiations themselves, including price.