Telkom SA SOC Limited, one of South Africa’s largest mobile carrier said it has walked away from its plans to acquire Cell C.
In a statement issued by the company, the mobile carrier said it pulled the plug on the deal after Cell C rejected its terms.
It would be recalled that Telkomannounced two weeks ago that it was interested in buying the financially distressed Cell C.
In an official statement confirming its decision, Telkom said:
“Telkom has received written notice from the Cell C board of directors rejecting its non-binding proposal,”
The Telkom board continues to believe the offer is a compelling proposition that would have created significant value for all stakeholders including Telkom’s shareholders,”
As a piece of advice to its shareholders, the company said: “As the offer has been rejected by Cell C’s board of directors, Telkom shareholders are advised that they are no longer required to exercise caution when dealing in Telkom securities.”
The rejection of the bid-offer by Cell C is seen as a move to go ahead with its recapitalization plans with the Buffet Consortium and other unnamed investors.
Earlier this month, Cell C signed a deal with MTN on roaming plans to reduce its operating expenditure on its network infrastructure. While the deal is now under investigation, there are signs that a recapitalization is the only lifeline for Cell C.