KT Corp may abandon offer for Telkom

Absa Asset Management  says Korea Telecom (KT Corp) may cut the price of an offer to purchase a stake in Telkom (TKG) and may even abandon the 3.8 billion rand transaction, according to Bloomberg.

Telkom and South Korea’s largest phone and Internet company, began talks in October last year.

KT Corp has offered 36.06 rand a share for 20% of Telkom, 36% higher than Telkom’s current value, the media group reported.

The stock has dropped by almost a fifth since announcing talks with KT Corp as it faces a possible antitrust fine of as much as 3.25 billion rand.

“The market is bracing itself for maximum damage,” Chris Gilmour, who helps manage the equivalent of $1 billion at Johannesburg-based Absa Asset Management, said.  KT Corp “might want to reduce the price and even opt out of the deal.”

Telkom and KT Corp declined to comment to e-mailed requests for comment from Bloomberg News.

In afternoon trade, shares in the group declined 2.2% or 58 cents to R25.79 on the JSE.