Embattled Telkom SA rubbishes merger talks with Rain, confirms negotiations with MTN

In the wake of a widely publicised merger between Telkom SA and Rain, the struggling parastatal has rubbished the reports of an offer from its competitor.

Telkom SA has come clean regarding the partnership, arguing that there is no offer from Rain but the management can consider it once it comes through.

The proposed merger has made headlines in the telecoms industry over the past few hours and Telkom made it clear that they are engaged in talks with a mobile operator, MTN.

Rain is a mobile internet operator backed by South African billionaire, Patrice Motsepe, ex-FNB boss Michael Jordaan and OUTsurance co-founder Willem Roos.

The company sent shockwaves in the industry when it announced that it has tabled a request to present to the Telkom board.

According to SundayWorld, the proposal would ultimately result in the merger of the two companies.

“It (Rain and Telkom merger) is a logical alternative to simply selling to MTN and would also be consistent with the pro-competitive policies of Government. The merger would bring together the considerable infrastructure and mobile businesses of Telkom and the successful new age 4G and 5G businesses of rain,” Rain said.

In contrast, Telkom has distanced itself from the news, responding that they locked in negotiations with MTN.

“Telkom can confirm that no offer or proposal has been received from rain. If an offer or formal proposal is received from rain, the board of Telkom (“the Board”) will consider it in accordance with its legal obligations,” Telkom said.

“Those discussions (with MTN) are continuing and accordingly, shareholders are advised to continue to exercise caution when dealing in Telkom securities.”

Following the announcement made by Rain, the Takeover Regulation Panel (TRP) has lashed out at the company, as the announcement was issued without the panel’s approval.

Back in July, MTN and Telkom confirmed to their shareholders that they had entered into a formal discussion about MTN buying Telkom.

As things stand, MTN will have to buy out the government as it holds a 40 percent stake in Telkom, while the Public Investment Corporation (PIC) remains the owner of the remaining 14 percent of Telkom’s equity.

Main image: Telkom SA
Sunday World