The M-Cell share price has gained 25% this year to stand at R16.50 at noon today as rumours persist that government has finally found a buyer for its 20% stake in the company.
Government has been trying to sell off the stake in the MTN parent company since early last year but the introduction of a third cellular player, the virtual collapse of telecommunications share prices and uncertainty around the new telecommunications policy have prevented a deal from being struck.
However, traders and market insiders are now near unanimous in their belief that the sale is imminent, and are debating whether the buyer is a South African or overseas operator.
Some economists believe it is almost certain that the buyer will come from offshore as the rand has strengthened considerably in early morning trading today, indicating a belief that money will be flowing into the country soon.
Both the rand and the bond market have strengthened on the back of the rumour, reports ITWeb`s sister publication ZAFinance.com.
According to Andrew Kaplan, a telecommunications analyst at Schroder Salomon Smith Barney, names such as Dutch operator Orange and Portuguese Telecom have been bandied about as potential buyers.
Orange has long been seen as a possibly buyer, being named as a strong contender as early as March last year.
A share price of R16.50 values M-Cell at more than R27 billion.
The Department of Public Enterprise is to hold a press conference early this afternoon where the issue is expected to be clarified. To date the department, which is responsible for the sale of the M-Cell stake, has only been willing to say that negotiations are ongoing.
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