Vodacom, CIVH deal spooks market, opens Telkom race

For Rain, if the tie-up goes through, the data-only network hopes to create an entity valued at R40 billion. Rain is valued at around R16.67 billion, while Telkom’s market cap is around R24.24 billion.

“Telkom is a perfect candidate. With MTN making another approach, other parties have realised they may also pursue this opportunity to improve their position. Toto Investments is more speculative, looking to expand its investment portfolio in infrastructure and hoping to do it relatively inexpensively.

“Even apart from this, Telkom has been struggling, and becoming part of a larger entity with a larger mobile subscriber base and enterprise-focused services would enhance Telkom’s position in the market,” comments Pater. “With the Vodacom deal with CIVH, the market is clearly changing. The moment someone moves, everyone else will start questioning and reassessing the market. At the moment, everyone is reassessing going forward, and it is known Telkom assets are undervalued and underutilised.”

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