Vodacom last man standing in Neotel acquisition?
MTN appears to have withdrawn from a potential acquisition with telecoms firm Neotel, after the mobile operator’s president and CEO, Sifiso Dabengwa, said the group was not currently in acquisition talks.
However, the group lead admitted in a press conference on Thursday (15 August) that MTN had been part of the discussion process regarding a possible sale of Neotel.
That would leave Vodacom in the running, with sources close to the negotiating process claiming that the group is currently performing due diligence on Neotel.
In May 2013, MyBroadband reported that industry sources had indicated that Vodacom and MTN were in separate discussions with Neotel to acquire the fixed-line operator.
One industry source said that Dimension Data was also interested in a potential deal.
It was reported that formal bids for the group were due in June.
All players mum
When asked about MTN possibly acquiring Neotel, Dabengwa said that the operator is “continuously looking (at acquisitions) – it’s part of what we do on an ingoing basis”.
Nik Kershaw, executive for investor relations at MTN Group, reiterated the group’s stance on merger speculation saying that, “in line with internal corporate governance, as well as JSE requirements, MTN does not comment on market speculation”.
Similar questions aimed at Dimension Data yielded the same response, with the firm saying that it does not respond to market rumour, speculation or hypothetical questions about the company or any of its affiliates or subsidiaries.
In early August, two independent industry sources close to negotiations told MyBroadband that Vodacom is currently performing due diligence on Neotel following successful acquisition discussions between the companies.
Vodacom’s spokesperson Richard Boorman said on the matter: “We explore investment opportunities on a regular basis, but we can’t comment on any specific companies”.
Neotel has declined to comment on all points.
Neotel performance
In May, Neotel CEO, Sunil Joshi said that the group had trenched 8,000 kilometres of its own metro fibre, reaching 4,200 companies, having invested R500 million in capex in in FY2013, and adding to its total of R5 billion in infrastructure since inception.
Joshi said that the group had achieved its first operating profit since it launched in the country in 2006.
He said that Neotel was earnings before interest and taxes positive for the year ended March 2013, having first reported its ebitda positive status in 2012.
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