By Tannur Anders
JOHANNESBURG (Reuters) -The chief executive of South Africa’s third-biggest telecom company Telkom said on Tuesday his company did not need saving, as he reacted to an acquisition bid led by his predecessor and a steep fall in full-year earnings.
“We do not need a knight in shining armour, be it my former employee or my former employer,” Telkom CEO Serame Taukobong said at the company’s results presentation.
On Monday, Telkom confirmed it had received an unsolicited offer to buy a substantial stake in the partly state-owned company.
The offer is led by former CEO Sipho Maseko and backed by the South African Government Employees Pension Fund.
Taukobong told Reuters the company was still assessing the offer and could not yet talk about pricing or due diligence.
But he also said, at the presentation, a proposal would not be considered “until somebody comes to our (board) chair with a strong letter and also proof that they can deliver”.
Telkom’s shares have fallen by about 40% over the last 18 months, as it has reviewed its options to improve operating margins dented by inflation and the power cuts that are crippling the country as a whole.
As well as the Maseko-led bid, Telkom has been a potential acquisition target for the continent’s biggest telecom player MTN while smaller rival rain also considered it for a merger.
Telkom said on Tuesday that its full-year headline earnings per share fell 76.6%, citing the worst power cuts on record and a sluggish economy.
It said it would not resume dividend payments for at least another year given its cash position and the state of the economy.
(Reporting by Tannur Anders; editing by Alexander Winning and Barbara Lewis)
