Shares in Telkom plummeted more than 10% on Friday after a report suggested talks with rival MTN Group about a takeover had stalled.
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MTN Group’s talks to buy Telkom have stalled following a rival deal proposal from Rain, people familiar with the matter said.
Shares in Telkom rallied on Tuesday after the company informed investors that it is still in talks with MTN Group about a transaction.
It appears Telkom’s apparent willingness to engage with Rain about a possible deal could scupper its merger talks with MTN Group.
Rain has formally made a non-binding proposal to Telkom that would see the latter acquire the former through the issue of new Telkom shares.
Telkom’s largest shareholder, government, voted against the appointment of a large number of directors to the company’s board at its AGM on Wednesday.
In separate but identical regulatory filings on Monday, MTN Group and Telkom said they remained locked in discussions about a potential combination.
Telkom has become the latest telecoms operator to muscle into the banks’ traditional area of expertise, offering loans to small businesses.
Rain has withdrawn its press release of 11 August in which it announced a plan to approach Telkom’s board about a merger.
Government has received an unsolicited bid for its 40.5% stake in Telkom from an investment firm called the Toto Consortium.