Blue Label Telecoms has agreed to acquire control of Cell C, taking its shareholding beyond 50%, and will now seek the necessary regulatory approvals.
The JSE-listed fintech and telecommunications group said it is preparing a filing at the Competition Commission and will also approach communications regulator Icasa.
TechCentral first reported last October that Blue Label’s management team was entertaining the idea of taking control of the troubled mobile operator.
Following last September’s recapitalisation of Cell C, Blue Label’s interest in the company increased from 45% to its current 49.5%.
Now Blue Label co-CEO Brett Levy has said “definitely yes” when asked about the company’s plans to take control of Cell C.
“It is a process to apply to the Competition Commission, and we have been working on that,” Levy said in response to questions at a media conference to announce the group’s annual results for the period ended 31 July 2023.
“We will apply to the Competition Commission this year, but the process can take six months or even two years. We’ll keep the market updated on the process, but it is definitely our intention [to take control].”
Icasa will be approached to approve the change of ownership of Cell C.
‘No-man’s land’ with Cell C
Levy described Blue Label’s current shareholding in Cell C as being in a “no-man’s land”. Its options are either to sell down its stake, which it doesn’t intend to do, or “move into a position where we can get involved on a day-to-day basis”.
He said Cell C has the potential to add “tremendous value” to Blue Label, if the business is led correctly.
Levy first mooted the possibility of buying control of Cell C in a call with investors in October 2022. He said at the time that should Blue Label move to take control of Cell C, it wouldn’t necessarily encounter significant regulatory roadblocks.
Read: New Cell C boss won’t start a price war
“There’s nothing that stands out from a Competition Commission point of view; and there’s definitely nothing that stands out from an Icasa point of view,” he said.
Read: Cell C a big drag on Blue Label earnings
“Everyone knows what we’ve [done] over the last seven years to save this business, and the value we could add to it if we had control of it. From a change of control [perspective] at Icasa, I think everyone would welcome it if we went this route, so everyone has stability.” – © 2023 NewsCentral Media