• Ahead of its financial results presentation this week Telkom has confirmed it has received an offer to acquire a controlling interest from a consortium.
• The consortium includes an investment fund set up my former Telkom chief exec Sipho Maseko.
• Telkom has said it is considering the offer as per its fiduciary duty, but that it was “non-consensual”.

This afternoon Telkom has confirmed that it has received “an unsolicited non-binding indicative letter” from a consortium with the intention of acquiring a controlling stake in the telecommunications firm.

The consortium is comprised by investment fund Afrifund Investments, as well as Axian Telecom, and the Government Employees Pension fund managed by the Public Investment Corporation.

Afrifund Investments is a notable mention as the fund was founded by former Telkom group chief executive officer, Sipho Maseko. The fund has a focus on plugging infrastructure and technology gaps as well as investing in food and agricultural activities.

When it comes to technology Afrifund notes that Africa has embraced technology and that internet adoption has climbed quickly over the last decade. Investing in a telecommunications firm with a strong footprint in the African market and potentially growing it would be an interesting move.

Axian Telecom meanwhile is a growing force the African mobile connectivity market. In its earnings results for Q1 2023, Axian reported 12 percent growth in revenue generating subscribers compared to Q1 2022.

While Telkom has confirmed it has received this letter from the consortium it hasn’t indicated whether it will be taking the offer up. The firm did say that its board of directors was assessing the merits of the offer in accordance with its fiduciary duties.

“In this regard, the Company has requested the Consortium to provide further clarity on several matters, including the proposed offer price and certainty of funding. As such, discussions remain of an exploratory and non-consensual nature, there being no certainty that the outcome of these discussions will result in a transaction,” Telkom told shareholders.

Further to this, the firm has told shareholders to exercise caution when dealing with the company’s shares until a further announcement is made.

This offer to acquire a controlling stake in Telkom is the latest offer with both rain and MTN having previously made attempts at acquiring the telco. Ultimately however, neither bid was successful.

Last month Telkom announced it was deliberately impairing its assets, namely OpenServe, Telkom Consumer, Gyro, and BCX, to the tune of R13 billion.

In addition, Telkom will cut its workforce by around 15 percent.

The group will present its financial results for the year on Tuesday and we’re sure the consortium will be watching on eagerly.