• Telkom has rejected a takeover proposal from its former CEO Sipho Maseko.
• Maseko led a consortium of companies in a bid to buy a controlling stake in the semi-state owned operator.
• Current CEO Sareme Taukobong says that Telkom doesn’t need a saviour even as it continues to post dismal earnings.

A month after initially receiving a proposal to sell a controlling stake of its company to a former chief executive, semi-state-owned Telkom has squashed talks.

Former Telkom CEO Sipho Maseko led a consortium of firms, including Axian Telecom, Afrifund Investments Proprietary and the Government Employees Pension Fund in a proposal to purchase a controlling stake of the telco, a South African staple and among the first in the country.

However, talks for the proposed takeover were rejected by current CEO Serame Taukobong, who said that Telkom does not need a “knight in shining armour,” according to a report from Developing Telecoms.

Telkom, of which 39.8 percent is owned by the South African government, has been struggling to turn a profit in the last few years. In its most recent results statement, the telco said that sustained loadshedding, decreased consumer spending and a slow-growing local economy had placed significant pressure on its ability to make money.

Headline earnings per share, the returns investors receive, were down 76.6 percent year-on-year, to R1.34.

In February, the company said it would begin letting go of employees in order to minimise losses amid skyrocketing spending due to ceaseless blackouts in South Africa.

Officially, Telkom said that it rejected Maseko’s offer because it was “not in the best interest of shareholders.”

The company has weathered takeover talks before. In July last year it was revealed that MTN – among the largest telecoms on the African continent – was in talks to acquire Telkom, though the talks fell through and no purchasing amount was ever made public.

In October 2022, smaller local mobile network ISP rain made it clear that it wanted to be bought by Telkom. Together the two firms would create a “real” competitor to take on larger telcos like Vodacom and MTN. This proposed deal also fell through after the South African Takeover Regulation Panel (TRP) deemed it “unlawful.”

Telkom has halted dividend payments to shareholders for the next year as the company engages in a wide-ranging turnaround strategy steered by Taukobong. It hopes significant investments into future-minded technologies and solutions will aid in turning its lucks around.

[Image – CC 0 Troy Squallaci on Pexels]