South Africa’s telecom operator, Rain, has been instructed by the Department of Trade and Industry’s Takeover Regulation Panel to withdraw a press statement regarding a proposed merger with Telkom.
Early on Thursday, the telecom operator released a statement in which it requested to present the Telkom board with a proposal to merge the two entities.
However, the Takeover Regulation Panel took a dim view of Rain’s approach.
In response, the regulator said, “The Takeover Regulation Panel (TRP) has noted, with grave concern, a press announcement issued by Rain proprietary limited (“Rain”) regarding a potential offer to merge with Telkom on 11 August 2022. We wish to inform the industry that Rain’s announcement was issued without the TRP’s prior approval as required in terms of Regulation 117 of the Companies Regulations.”
“Furthermore, the announcement was issued notwithstanding the TRP’s instructions to Rain that no such announcement should be made without the prior approval of the TRP,” the panel stated.
The Takeover Regulation Panel indicated that Rain’s publication of the announcement was unlawful.
“Rain has been instructed to retract the announcement,” the TRP added.
According to Rain CEO Brandon Leigh, a merger with Telkom would create a 5G powerhouse and a strong third player to compete with telecom giants Vodacom and MTN.
Leigh also said the merger offers a more pro-competitive alternative than the government selling Telkom to MTN.
However, Leigh did not give details on how Rain proposed transaction would be structured, saying that those particulars would need to be negotiated.