Objections to BCX deal expected this week

By Nicola Mawson for Telkom
Johannesburg, 11 Jul 2006

South Africa`s competition authority is expecting objections to Telkom`s proposed R2.36 billion-takeover of Business Connexion (BCX) to start arriving this week.

Liz'el Blignaut, the Competition Commission`s divisional manager of mergers and acquisitions, says a number of parties indicated they would be making submissions before the deal was filed with the commission. The commission will also be meeting with some objectors this week.

The deal was filed with the authority in mid-June and received High Court sanction in the second-last week of June.

Market observers have commented that the deal, in line with the fixed-line operator`s stated intention to respond to increasing liberalisation, would further entrench the fixed-line utility`s position of dominance in the market.

Blignaut said while objections were expected to be received during the course of the next two weeks, the investigative process could overrun the usual 40 days. In such an instance, the commission would request more time from the parties.

However, despite the commission`s expectations that this will be a lengthily process, she does not expect it to be as complex as the recent failed Sasol/Engen merger, which saw heavyweight industry objections and protracted public hearings.

Blignaut, while not able to give specific details, said objections to the Telkom-BXC deal were expected from individual companies, as well as groups of companies with similar interests.

Telkom has offered R9 a BCX share, which closed on Monday at R8.17, 2c up on Friday`s close.

Once the commission has concluded its investigation, it will make a recommendation to the tribunal, which would hold public hearings.