South Africa’s Telkom and data-only network operator Rain have terminated merger talks.
Telkom informed investors on Wednesday that after initial discussions, but prior to any due diligence, the parties have decided that a suitable transaction is not possible at this time.
“Telkom continues to execute its strategy to unlock value for shareholders and will provide an update on
progress in this regard in due course,” said the company.
Also read: GUGU LOURIE: MTN’s battle for Telkom is actually no contest
Telkom shares were trading 10% higher at R35.68 by 14h20 today, maybe signalling a relief from the market that the deal collapse.
Investors may also be expected MTN to restart talks with Telkom.
Also read: MTN Pulls Out Of Talks To Buy Telkom
Last October, Telkom announced 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 at the time.
iscussions 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.”
Last July, 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.
Also read: GUGU LOURIE: SA regulators must allow MTN proposal to buy Telkom
