Tata Communications surged 5.85% to Rs 199.10 at 9:17 IST on BSE after Vodacom and the shareholders of Neotel announced that they have entered into exclusive discussions regarding a potential acquisition of 100% of the shares of Neotel by Vodacom SA.
Tata Communications which has a strategic investment in Neotel, made the announcement after market hours on Monday, 30 September 2013.Meanwhile, the S&P BSE Sensex was up 35.39 points or 0.18% at 19,415.16.
On BSE, 36,000 shares were traded in the counter as against average daily volume of 1.10 lakh shares in the past one quarter.
The stock hit a high of Rs 199.80 and a low of Rs 196.60 so far during the day. The stock had hit a 52-week high of Rs 257.75 on 4 January 2013. The stock had hit a 52-week low of Rs 136.90 on 5 August 2013.
The stock had outperformed the market over the past one month till 30 September 2013, surging 14.31% compared with the Sensex's 4.08% rise. The scrip had also outperformed the market in the past one quarter, jumping 19.69% as against Sensex's 0.08% fall.
The mid-cap company has equity capital of Rs 285 crore. Face value per share is Rs 10.
Vodacom and Neotel said that the finalisation of the transaction is subject to the successful conclusion of commercial negotiations and receiving the requisite regulatory and corporate approvals. This transaction, if concluded, would stimulate greater competition in the South African fixed telecommunications sector and will accelerate the provision of high speed data links. It would also result in the combined entity being able to offer an expanded product range and, as a consequence, enhanced customer choice, a joint statement from the two companies said.
Vodacom is an African mobile communications company providing voice, messaging, data and converged services to around 50 million active customers, Vodacom is majority owned by Vodafone, one of the world's largest mobile communications companies by revenue. Vodacom is listed on the JSE and its head office is in Johannesburg, South Africa.
Neotel is South Africa's first converged communications network operator. It provides a range of value-added voice, internet and data services for businesses, wholesale network operators and providers and retail customers using its IP Next Generation Network, powered by Neotel's high-performance fibre optic backbone. Neotel connects the major centres in South Africa to each other and to the world, directly linking its infrastructure into Tata Communications' global Tier 1 network.
Sunil Joshi, Neotel CEO, said, "We believe this presents an exciting and attractive opportunity for all parties, especially our customers to whom we will be able to offer more meaningful and innovative products and services. This transaction, if concluded, would further enable Neotel to extend its footprint in South Africa and add the mobile capability that our customers require for their business' growth in a new world of converged communications. If completed and approved, this transaction will support Government's ICT priorities to increase investment in the next generation of telecommunications services and facilitate growth in the broader economy."
Speaking about the transaction, Vodacom Group CEO Shameel Joosub said, "There are a number of important steps that we still need to complete in order to conclude the transaction. If the deal is implemented, Vodacom intends to put significant investment into the combined entity to provide high-speed fixed connectivity to many more businesses and consumers. By further building on the capabilities within Neotel, we would also aim to develop entirely new services such as fibre to the home and business. Neotel has access to over 15,000km of fibre-optic cable, including 8,000km of metro fibre in Johannesburg, Cape Town and Durban. Spectrum is also an important consideration as the combined entity could use this resource more efficiently, and in doing this we can keep pace with South Africa's rapidly growing demand for mobile data. This transaction is all about providing greater choice and better infrastructure for South Africa's businesses and consumers."
Separately, Tata Communications before market hours today, 1 October 2013, announced an agreement with Arkadin, one of the world's largest and fastest growing collaboration service providers. Arkadin has become an official APAC provider of Tata Communications' recently launched jamvee conferencing -0 an on-demand unified communication service which enables, for the first time, anyone, anywhere, to instantly access a business video meeting on any device. The partnership agreement with Arkadin will first roll-out in Australia and New Zealand followed by the rest of the Asia Pacific region, Tata Communications said in a statement.
Tata Communications reported consolidated net profit of Rs 94.52 crore in Q1 June 2013, as against net loss of Rs 142.86 crore in Q1 June 2012. Net sales rose 9.5% to Rs 4497.98 crore in Q1 June 2013 over Q1 June 2012.
Tata Communications, along with its subsidiaries is a leading global provider of a new world of communications.
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