MTN Pulls Out Of Talks To Buy Telkom

Telkom announced on Wednesday that MTN had halted talks over its proposed takeover of the country’s biggest fixed-line telephone group.

“MTN terminated discussions in relation to the MTN Proposal on 18 October 2022, as Telkom was not in a position to provide MTN with assurances around exclusivity,” Telkom informed investors.

Discussions were at an early stage and had not progressed to due diligence nor had a binding offer been received by the Telkom board, said the company.

“The Telkom Board has a legal and fiduciary duty to consider all bona fide offers. Shareholders are therefore advised that they no longer need to exercise caution when dealing in the Company’s securities,” added the company.

“Telkom continues to execute its strategy to unlock value for shareholders and will provide an update to the market on progress in due course.”

Three months ago, MTN South Africa announced today that it is in early talks to buy Telkom, the partially state-owned fixed-line telephone operator.

Africa’s largest mobile phone operator said in a statement it had entered into discussions
to buy the entire issued share capital of Telkom in return for shares or a
combination of cash and shares in MTN.

“Discussions are at an early stage and there is no certainty that the Transaction will be consummated,” stated MTN at the time.

Also read: GUGU LOURIE: SA regulators must allow MTN proposal to buy Telkom

Also read: Rain Tables A Share Swap Deal With Telkom

Telkom informed investors today that it has received a non-binding offer from data-only network provider Rain.

In a statement, Telkom said it was proceeding with its strategy to unlock value for its shareholders, underpinned by the view that its share price does not reflect its intrinsic value.

“The Telkom Board of Directors, conscious of economic and market dynamics and in accordance with its legal obligations, is considering various strategic options, including non-binding merger and acquisition proposals received to date.”

The company added: “Further to the SENS issued by Telkom on 12 August 2022, shareholders are advised that Telkom received a non-binding proposal from Rain on 14 September 2022, in terms of which Rain proposes the potential acquisition of Rain by Telkom for newly issued shares in Telkom”

Telkom said its board was evaluating the Rain proposal and “is not yet in a position to express a view thereon”.