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.
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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.
New research shows South Africans actively dislike telecoms operators, with the industry ranked last in net customer sentiment, below banking, insurance and retail.