It appears Telkom’s apparent willingness to engage with Rain about a possible deal could scupper its merger talks with MTN Group.
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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.
African Rainbow Capital Investments has attached a valuation to wireless Internet operator Rain of R17.9-billion, a 7.9% increase over last year’s figure.
In separate but identical regulatory filings on Monday, MTN Group and Telkom said they remained locked in discussions about a potential combination.
Government has received an unsolicited bid for its 40.5% stake in Telkom from an investment firm called the Toto Consortium.
Telkom said it has not it had received a proposal from Rain and remains in talks with rival MTN about a possible transaction.
Ignore for a moment that Rain, although growing fast, is a relative pipsqueak next to Telkom. Does a merger make any sense? By Duncan McLeod.
Rain plans to table a proposal to Telkom’s board that it should merge with the wireless broadband provider instead of pursuing a deal with MTN.
The Takeover Regulation Panel has accused Rain of flouting companies regulations in announcing its plan to approach Telkom’s board about a merger.
Major operators have created a new, non-profit association to look after their interests and work with government and regulators.