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JOHANNESBURG, Nov 16 (Reuters) - South African fixed-linephone company Telkom is yet to make an offer to buycontrol of mobile operator Cell C, its chiefexecutive said on Monday, denying a report the company has had a$972 million bid rejected.
However, CEO Sipho Maseko indicated that he would pursue adeal to combine the third and fourth largest operators in themobile market.
"I haven't had any offer rejected because I haven't madeone," Maseko told Reuters. "I expressed an interest and I askedfor due diligence. Based on the outcome of the due diligence, Iwill then be able to make an offer."
Bloomberg reported on Oct. 29 that Oger Telecom has rejectedTelkom's 14 billion rand ($972 million) offer for its 75 percentstake in South Africa's number three wireless phone operator.
Telkom launched a mobile phone business five years ago tooffset declining sales from its traditional operations. But thatbusiness faces a saturated market dominated by MTN Group and Vodacom -- a unit of Britain's Vodafone.
"We are a number four player and Cell is a number threeplayer, and we think that getting these two together will makeus deeply competitive in the future and that is why we are keento explore that opportunity," Maseko said.
Telkom is near the end of the first phase of a turnaroundstrategy that included cutting jobs, outsourcing services suchas telephone directory printing and selling some properties.
Buying Cell C would give Telkom about 20 million mobilephone users but also a company facing a consumer backlash due toslow network speeds.
Cell C also labours under debts of 160 million euros ($178million) and last year agreed a restructuring with bondholders,involving a three-year maturity extension to July 2018.
Telkom reported a 14 percent increase to 280.6 cents inheadline earnings per share in the six months to end Septemberhelped by cost cuts and a robust showing in its mobile phonebusiness.
"We are pleased with the improved performance of our mobilebusiness and our multiyear cost efficiency program and willcontinue with these initiatives to bring about furtherimprovements," Maseko said.
Shares in the company jumped 6.46 percent to 62.92 rand asof 1347 GMT, outpacing a 1 percent rise in the JSE All-shareindex. (Reporting by Tiisetso Motsoeneng; Editing by Keith Weir)
