Huge price hit by MTN muscling in on iTalk

HUGE Group shares took a tumble yesterday after news that its R511m bid for iTalk Cellular was being jeopardised by MTN.

Huge shares dropped 5,44% to trade 19c down at 330c as it prepares to challenge MTN’s belated effort to muscle it out of the iTalk purchase.

MTN already owns 41% of Durban-based iTalk and intends to exercise a pre-emptive right to acquire the remaining 59%, despite Huge being so deep into the process that it has received Competition Commission approval to buy the shares itself.

Yesterday, Huge Group CEO Anton Potgieter confirmed his telecoms company was preparing evidence to persuade the competition authorities to veto MTN’s move.

It will argue that allowing MTN to take over iTalk, a reseller of cellular contracts and airtime, would substantially lessen competition in the mobile telecoms market.

Potgieter said he believed its objection had enough merit to see the commission block MTN’s deal, so Huge could at last close the deal itself. That would call for MTN approval, as iTalk sells airtime exclusively for MTN’s network and has the operator as a shareholder.

“All that this means is that Huge Group will effectively have one further hoop to jump through in its effort to acquire a controlling interest in iTalk,” Potgieter said.

The number of independent resellers of cellular airtime still in business is dwindling after a concerted effort by MTN and Vodacom to absorb those dealers into their own operations.

The declining lack of choice for consumers has come to the attention of the competition authorities, giving Potgieter the hope that further consolidation by the dominant network operators will be vetoed.

By: Lesley Stones