»Telkom and Rain have agreed to end merger talks«
Telkom, the third-largest cellular provider in South Africa, has halted talks with data-only service Rain regarding a prospective acquisition.
In the past year, Telkom has engaged in takeover talks with Rain and MTN. Telkom and MTN disclosed their discussions in July 2022, with MTN proposing to acquire Telkom in exchange for shares or a combination of cash and shares.
Later, Rain revealed that it has proposed a merger proposal with Telkom involving the possible acquisition of Rain in exchange for newly issued Telkom shares.
Nevertheless, according to media accounts, Telkom refuted claims that the statement was made without authorization. In the end, Rain revoked the declaration and subsequently released an official, authorized proposal.
Due to Telkom’s conversations with Rain, MTN walked away from the table, causing Telkom’s share price to decrease by nearly 20%.
Telkom informed its shareholders in a SENS report on Wednesday that conversations with Rain would not continue and that the transaction was presently not feasible.
“Following the SENS release on 30 September 2022 regarding a non-binding proposal from Rain, Telkom shareholders are told that Telkom and Rain have ended discussions regarding Rain’s proposal of the potential acquisition of Rain by Telkom in exchange for newly issued Telkom shares.
“Following preliminary discussions, but before conducting due diligence, the parties have determined that a suitable transaction is not possible at this time.”
The termination notice sent the mobile operator’s stock jumping Wednesday around lunchtime. Shares of Telkom were last quoted at R36.20, up 11.8% for the day.
»Telkom and Rain have agreed to end merger talks«