TELECOMMUNICATIONS
Net1 explains why Blue Label deal was called off
Net1 has moved quickly to explain its decision not to proceed with the acquisition of a 15% holding in Blue Label for R2bn, saying this transaction along with that of Cell C and airtime distributor DNI-4PL Contracts, would have been detrimental to shareholder value. But Net1 will still proceed with the acquisition of a 15% shareholding in Cell C for R2bn and 49.6% in DNI for an undisclosed amount. The proposed three investments by Net1 required the utilisation of cash reserves, bank finance and the issuance of shares of its common stock to fund the transactions. It said the material reduction in the Net1 share price in the first five months of 2017 and the lack of volume demand for its shares at this time would have made it detrimental to Net1 shareholder value for it to proceed with a share placement. "The board accordingly concluded that Net1 could only use cash resources and bank debt and could therefore only conclude two of the three investments," the company said. At the time o...
Would you like to comment on this article?
Sign up (it's quick and free) or sign in now.
Please read our Comment Policy before commenting.
Subscribe now to unlock this article.
Support BusinessLIVE’s award-winning journalism for R129 per month (digital access only).
There’s never been a more important time to support independent journalism in SA. Our subscription packages now offer an ad-free experience for readers.
Cancel anytime.
Questions? Email helpdesk@businesslive.co.za or call 0860 52 52 00. Got a subscription voucher? Redeem it now.