Vodafone not interested in 100 pct of Vodacom

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LONDON/NEW YORK, Sept 19 (Reuters) Mobile phone giant Vodafone Group Plc is only interested in securing a majority stake in South Africa's top mobile group Vodacom, not in buying the whole business, Vodafone's chief said on Wednesday.

Chief Executive Arun Sarin said Vodafone would not be interested in buying the entire 50 percent Vodacom stake it does not already own because it might otherwise have to sell part of the holding at a discount at a later stage.

''We would not be interested in buying the entire 50 percent stake,'' Sarin said told a Goldman Sachs investor conference in New York, adding that Vodafone otherwise risked paying a retail price only to sell part of the stake at a wholesale price later.

South Africa's largest telecoms operator, Telkom, which owns the remaining 50 percent of Vodacom, said earlier this month it was in talks with Vodafone after launching a review of its telecoms businesses.

Telkom, whose Vodacom stake is valued by analysts at about 75 billion rand (.6 billion), saw its shares drop 2.4 percent to 175.60 rand on the news.

''The market was anticipating that Vodafone would buy the whole of Vodacom for an exorbitant amount of money which would value Telkom at north of 200 rand,'' said Garth Mackenzie, head of derivatives trading at BoE Stockbrokers.

''I think it (the share price fall) could go on a bit because a lot of hedge funds went long on Telkom and short on (South African rival) MTN and they may need to unwind those positions.'' Nevertheless, the South African government -- which is a majority shareholder in Telkom -- is expected to ensure that at least 5 percent of Vodacom is sold to a consortium of black Africans under its BEE (black economic empowerment) project.

The project is designed to ensure blacks are encouraged into the mainstream economy following their exclusion under white apartheid rule.

Vodafone shares were trading just over one percent firmer at 168.1 pence by 1410 GMT.

REUTERS DKS BD2005

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