Business Connexion`s (BCX`s) share fell 118c or 15.1% to 665c on the JSE this morning following news that talks with potential bidders, including Telkom and Bytes Technology Group (BTG) had come to an end.
BCX made the announcement last night after the market closed.
The share, which closed at 635c on 15 November, the day before BCX disclosed that it was in discussions, climbed as high as 850c in recent weeks. It closed at 780c yesterday, down from 810c on Tuesday.
Financial director Alan Farthing told ITWeb this morning that it was BCX that had terminated the talks.
"We have advised the potential bidders that they are not recognising the future value of BCX in their offers," he says. "Ultimately it`s a pricing issue."
The group said on 16 November that it had received "expressions of interest" and had decided to enter into talks with the potential bidders.
Later on the same day, Altron and subsidiary Bytes Technology Group (BTG) issued their own cautionary notice saying that BTG was in talks.
The following day Telkom, in response to an erroneous statement by one of its spokesmen, admitted that it was one of the parties engaged in talks with BCX.
Although BTG would not comment on its cautionary notice, it was also widely speculated that it was one of the potential bidders for BCX.
This was confirmed last night when BTG and Altron withdrew their cautionary notices shortly after BCX.
Telkom was not obliged to issue a cautionary notice, as acquiring BCX would not have been a large enough deal relative to Telkom`s size to make such a notice compulsory.
Farthing says there were more than just the two potential bidders, although he cannot disclose what other companies had shown interest in BCX.
Analysts have speculated that foreign companies might also have been among the potential bidders.
Commenting on the termination of the talks, Farthing says: "It certainly removes some of the uncertainty, which is always disruptive to management and staff.
"We didn`t put up a 'for sale` sign. We were approached. In some ways, it might have been good for us to be part of someone else, but in other ways not. There is a lot of value in this company."
The BTG share was trading 70c down at 1 030c this morning, while Telkom was 126c up at R133.65.
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