According to industry reports, South African state-owed telcos Telkom has informed shareholders that it has terminated discussions relating to Rain’s proposal about a potential acquisition.
If you recall, on 30 September 2022, Rain made a formal proposal to Telkom, suggesting that Telkom buy it with newly issued shares.
At the time, Telkom said in a notice, “After initial discussions, but prior to any due diligence, the parties have decided that a suitable transaction is not possible. However, Telkom continues to execute its strategy to unlock value for shareholders and will provide an update on progress in this regard in due course.”
The announcement comes in the wake of a tumultuous series of negotiations involving Telkom, Rain, and MTN.
Rain announced in August that it had proposed its deal to Telkom. However, Telkom denied receiving the proposal, and the Takeover Regulation Panel issued a stern rebuke against Rain’s media statements, saying it was made without approval.
Rain retracted its Telkom merger offer announcement and issued a properly approved formal proposal a month later.
When Telkom couldn’t provide a firm answer for how long it would need to consider Rain’s offer, MTN decided to terminate their discussions.
With Rain’s proposal now handled, MTN could reconsider continuing its talks with Telkom.