South Africa’s Telekom prepares counter takeover bid

SOUTH AFRICA’S largest telecommunications company, Telekom South Africa (TSA), has been holding talks with Portuguese investors, with a view to launch an alternative takeover bid for Portugal Telecom.

The operation is being prepared by a core nucleus of PT shareholders, led by João Pereira Coutinho, who believe that the Sonae bid for the company at just over nine euros a share could be too low for the national operator. The President of TSA, Papi Molotsane, landed in Lisbon last week to hold roundtable talks with the institutions and business leaders involved.

PT has so far denied any knowledge of the counter proposal and, by the time of going to print, neither Coutinho nor Molotsane had made comments to the press.

Banco Espírito Santo, which has a 8.36 per cent holding in PT, has also denied that it has been in negotiations with TSA with regards to moving forward with a rival takeover bid.

However, TSA’s interest – 37.7 per cent of TSA is owned by the South African state – in Portugal Telecom is nothing new. TSA’s apparent goal is to find a consortium of Portuguese partners, which would enable it to have a substantial, if not controlling, stake in Portugal Telecom.

An eventual partnership between PT and TSA could, however, enable both companies to expand their business operations in the southern part of Africa (Angola and Mozambique). PT has stated publicly that Africa remains an investment and expansion priority market, with its activities there totalling between 600 million and one billion euros.