Despite business media speculating that an unknown international group may be Telkom`s rival in its move to acquire Business Connexion (BCX), MTN has not denied it may be the mystery bidder.
Speaking at a press conference yesterday regarding its proposed R33.5 billion acquisition of Middle Eastern mobile operator Investcom, MTN Group CEO Phuthuma Nhleko stated the company would consolidate after the Investcom acquisition, but would still consider "rational" purchases, should they emerge.
When asked later in the day if MTN was the alternate bidder for BCX, MTN Group corporate affairs issued the following statement: "The MTN Group continues to identify and pursue value-enhancing expansion opportunities with a view to consolidating its position and diversifying earnings. We cannot offer further comment on specific activities at this time."
Similar market conditions
Commenting on the lack of denial in MTN`s statement, BMI-TechKnowledge research manager Roy Blume says a potential buyout of BCX by MTN certainly makes sense.
"MTN and Telkom are facing similar market conditions - pricing structures are under pressure and communication convergence is eating into revenue streams. Globally, telecommunication providers are looking for areas in which to diversify their interests, and data and IT services appear to offer the best match for that need.
"Additionally, MTN has already shown its intent to enter the data environment with the launch of MTN Networks," he explains.
Merrill Lynch telecoms analyst Meloy Horn agrees that an acquisition of a company like BCX could make sense in the current environment, but is concerned that the timing - coming off the proposed R33.5 billion offer to acquire Investcom - could be risky.
"The company is facing a South African market which is rapidly maturing, and the increase of communication convergence would make it an interesting proposal. Given the convergence of technologies and an increased focus on data services, this could be an interesting proposal.
"MTN does have the financial capacity to pursue this opportunity [Telkom is bidding an estimated R2.36 billion for BCX], but, following its recent 'shopping spree`, needs to consider the challenges of bedding down and integrating multiple acquisitions," she warns.
Blume says the acquisition of BCX could help MTN hone its corporate focus. Explaining that MTN has always positioned itself as the more "business friendly" choice, Blume says the addition of BCX to the fold could help it make the inroads into the business sector that MTN Networks has yet to produce.
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