Telkom South Africa has issued a market update which has spiked speculations that the company is looking into acquiring smaller South African wireless operator Cell C, according to local news portal Fin24.
In the market update, the operator said “it is in discussions which may have a material effect on the price of Telkom’s securities”.
Jose Dos Santos, Cell C’s CEO, has revealed that his company might be listed on the Johannesburg Stock Exchange (JSE) in the future. “It’s certainly something that is on my radar. I think that a legacy I’d like to leave is that we eventually have this company listed and unlock some real value,” he said.
Cell C’s parent company Oger Telecom had received six offers for its controlling 75% stake in the South African telco. In February 2015, Oger was planning to sell its stake in Cell C, though the valuation of the operator and its current debt were cited as the main issues blocking Oger’s exit from the company. In January 2015, Oger’s parent STC wrote down a ZAR1.2 billion ($102 million) investment in Oger Telecom, attributing the impairment to its stake in Cell C.