BT bidding for GijimaAst?

Johannesburg, 24 Jan 2008

Market speculation has it that UK telecommunications giant BT is in discussions to acquire JSE-listed GijimaAst.

Yesterday, ITWeb revealed it had received a detailed tip that the local company was the subject of a ₤100 million (R1.4 billion) takeover bid from an unnamed UK telco.

However, GijimaAst CFO Carlos Ferreira denied the company had any offers "on the table" at that time. Hours later, the company advised shareholders it was involved in discussions that could have a material impact on its share price.

All talk

Despite mounting speculation that the ICT provider is in talks with BT, Ferreira maintains nothing has changed. He also declined to disclose whether the discussions referred to in the cautionary saw GijimaAst on the buy or sell side of the table.

"We issued the cautionary yesterday, under the advice of our lawyers, to keep in line with the JSE's requirements. We are required to issue a cautionary if there is speculation in the market, so nothing has changed really. We continue to discuss various options, but there are no offers on the table," he says.

However, Irnest Kaplan, MD of Kaplan Equity Analysts, says there must be some form of discussions under way.

"Obviously something is going on. If there were no discussions under way then the company would just dismiss the allegations. What we don't know is whether this cautionary relates to purchase or a sale," he explains.

Kaplan adds he would be disappointed if the discussions did turn out to be an outright sale.

"A sale would be a real pity for the company. Under executive chairman Robert Gumede, GijimaAst has worked flat out to get the business on track and they are now seeing those rewards."

UK invasion

A local BT representative declined to comment on the matter, saying the company's policy is not to comment on rumour or speculation.

However, BT has already professed its interest in increasing its standing in the South African market.

In December, BT head of professional services for EMEA and Asia-Pac Adrian Saunders said the company had aggressive targets for the local market.

Saunders revealed BT Global Services' South African arm intends to double its revenue, from $100 million to $200 million, and double its staff complement from 80 to 160 within the next two years.

He added: "If local customers want pure telco services, there are plenty of providers which provide good quality telecommunications services and solutions. There are also companies that provide IT services and solutions and often customers go to them. Where we see a gap is in that convergence space, where customers don't want to talk to a local telco because they want more than pure networking, and they don't want to talk to a company which just, for example, offers middleware because they require convergent solutions."