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Telkom back at the negotiating table

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Telkom is back at the negotiating table, once again talking to Vodafone about selling off part of Vodacom and to new suitor Mvelephanda Holdings for the balance of the group's issued share capital. 

The two proposals were received on Friday, although Telkom has been in talks with Vodafone since 14 May, after a previous round of talks broke down last year.
Both proposals are subject to Vodacom being unbundled from Telkom.
In a statement this morning, Telkom says it has received a non-binding proposal from a wholly-owned subsidiary of Vodafone Group Plc to acquire a portion of Telkom's stake in Vodacom.
This proposal is subject to Telkom unbundling its remaining stake in Vodacom to Telkom shareholders.
The group also received a letter on Friday from a consortium of Mvelaphanda Holdings, affiliated funds of Och-Ziff Capital Management Group and other strategic funders, which explores the possibility of making an offer for the entire issued share capital of Telkom in a deal possibly worth R90-billion.
The letter makes it clear that the offer will only be made if a number of pre-conditions are met, including the unbudling of Telkom's 50% stake in Vodacom as part of the offer.
"The board of Telkom, in accordance with its fiduciary duties, will evaluate all bona fide offers with a view to maximising shareholder value. No transaction will be entered into without requisite shareholder approvals," the Telkom statement reads.
"Telkom will advise shareholders of further developments in this regard in due course."
Last year, Telkom was locked in talks about selling its stake in Vodacom to Vodafone and its fixed line assets to MTN.
However, both sets of talks were terminated at the end of November.
"After detailed investigations into the strategic, operational and regulatory aspects of such a transaction, the parties were unable to conclude a transaction in the best interests of their respective shareholders," the company said at that time.
At that time, a deal with Vodafone was subject to the MTN transaction being completed.
The telecommunications landscape in South Africa could become a very different place in the next few months, with MTN currently negotiating with Reliance Communications to build an emerging market wireless giant.