Telkom shares rise 3.3% on KT Corp headway
Telkom shares rallied in afternoon trade on the JSE on Thursday (26 April 2012), a day after the group said it had completed the diagnostic review process with Korea telecom (KT) Corp regarding a potential partnership.
By 13:00, shares in the local telecoms group gained 77 cents, or 3.3%, to R24.13 on the JSE, having hit a year low of R23.38.
A dealer at independent financial services provider, PSG Konsult said: “I can’t see anything else other than market reaction to the announcement that Telkom made yesterday (April 25).”
Telkom said in a statement that it is reviewing the final terms of the agreement.
“Shareholders are advised that the companies have completed the diagnostic review and harmonised their respective findings. The companies are now in the process of finalising the terms of the potential strategic venture.
“Once the terms have been agreed, the companies will present the potential strategic venture to their respective boards of directors for approval before engaging with key stakeholders and presenting the terms of the potential strategic venture to Telkom shareholders for approval,” it said.
Telkom further to advised that the discussions around the “potential strategic venture” are ongoing, and that there is no certainty that the transaction will be formally proposed or concluded.
KT Corp is South Korea’s largest telecoms company, and the leader in the country’s fixed-line and broadband segment with an 86% and 45% market share, respectively.
In October 2011, Telkom said it had entered into discussions to explore KT potentially acquiring a strategic equity shareholding of 20% in the post-issue ordinary share capital of Telkom.
Telkom currently has a market cap of approximately R12.5 billion.
The All Share index added 0.20% to 34,098, while shares in MTN declined 60 cents to R134.40, and Vodacom gained 71 cents to R109.31.
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