Telkom listing on track

By Phillip de Wet for Telkom
Johannesburg, 28 Feb 2003

The Telkom listing is on track for early next week and with the outbreak of hostilities in Iraq now very unlikely before the share starts trading, analysts see an equally low probability of a last-minute postponement.

The share is due to start trading on the JSE Securities Exchange on Tuesday. About 139.3 million shares or 25% of the company is to be listed at between R33.50 and R40.90.

Analysts say they expect the initial public offer price to be towards the lower end of the range, at about R35.

That would value Telkom at about R20 billion, with the company`s 50% stake in Vodacom accounting for about R15 billion of this.

One analyst says the Venfin share should also be interesting to watch after the Telkom listing.

"The question for people who want to invest in Vodacom is this: do they want exposure through Telkom or do they prefer the 15% of Vodacom owned by Venfin? That will depend on their opinion of Telkom and Venfin`s other operations and assets."

He says he expects the share to find support in the low R30s.

Who gets what?

But the price of the share may take a backseat to political considerations next week when the government provides statistics on the take-up of the pre-listing offer. It is widely anticipated that the Khulisa offer, which carries a 20% discount on shares, will be heavily oversubscribed. If so, the metrics the government uses to assign priority could become a contentious issue.

Khulisa is aimed at previously disadvantaged individuals, and it was originally understood that applications for such shares would be judged on race. However, when trade union group Solidarity attempted to derail the listing with court action and protests to the American government because of what it termed racial discrimination, the plan was changed. In a joint statement with Solidarity, the government said that income would be used to judge eligibility.

As a result, potential investors were advised to apply for both the Khulisa and the general pre-listing offer.

Yet in the intervening months there have been mixed signals from the government, with the likes of Public Enterprises minister Jeff Radebe saying there had never been a change in the Khulisa scheme and implying that race would still be a consideration.

Statistics on the take-up of Khulisa and the general offer, which carries only a 5% discount, are expected early next week.