South Africa: Telkom declines a takeover bid lead by its former CEO

The South African telecommunications company Telkom has rejected a consortium commanded by its former CEO, Sipho Maseko. Telkom SA disclosed in a filing with the stock exchange last week that its board had considered the proposal from the Public Investment Corporation, a consortium consisting of Axian Telecom, Afrifund Investments Proprietary, as well as the Government Employees Pension Fund.

The week after the decision, shares of the telecommunications company declined by seven percent. Telkom confirmed last month that it had received a proposal from a consortium led by Maseko, who served as CEO of the company for eight years until the end of 2021. The proposal did not impress the current CEO, Serame Taukobong, who stated that the company did not require "a knight in shining armor." 

Telkom has been experiencing some difficulties as of late: its full-year earnings decreased by 76.6 percent this year owing to inflation and increased operational costs resulting from South Africa's debilitating power outages. The operator was subject to interest from MTN Group regarding a prospective deal last year, prior to MTN's withdrawal. Telkom also considered interest from Rain, another South African operator, but discussions broke down as well.