Telkom said on Wednesday it had terminated discussions relating to Rain’s proposal for a potential acquisition for newly issued shares in Telkom.
The telecommunications operator told shareholders: “After initial discussions, but prior to any due diligence, the parties have decided that a suitable transaction is not possible at this time.”
The announcement comes after the collapse of talks between MTN and Telkom about two months ago. MTN walked away from the discussions because Telkom was entertaining a separate proposal from Rain.
It was announced in July last year that MTN and Telkom were in discussions, with the former proposing acquiring Telkom’s entire issued share capital in return for shares or a combination of cash and shares in MTN.
Although MTN had not outright said it was after exclusivity, Telkom released a statement that said the talks had soured because it “was not in a position to provide MTN with assurances around exclusivity”.
With Rain’s proposal now thwarted, MTN might perhaps consider resuming its talks with Telkom.
“Telkom continues to execute its strategy to unlock value for shareholders and will provide an update on progress in this regard in due course,” it said on Wednesday.
The Telkom share price rallied 10% on the JSE in late afternoon trade.
Anathi Madubela
Anathi Madubela is a business journalist with a keen interest in the retail sector.
