Telecommunications giant, MTN South Africa, has confirmed that talks are still ongoing in relation to the company’s planned take over of partially state-owned entity, Telkom.
The companies announced in July that they were in talks over a potential takeover.
MTN made a cautionary announcement on Monday morning on the JSE Sens news service.
MTN stated, “Further to the cautionary announcement dated 15 July 2022 in relation to MTN and Telkom SA entering into discussions relating to MTN acquiring the entire issued share capital of Telkom in return for shares or a combination of cash and shares in MTN (the Transaction), shareholders are advised that discussions are still in progress which, if successfully concluded, may have a material effect on the price of the Company’s securities. Accordingly, shareholders are advised to continue to exercise caution when dealing in the Company’s securities until a further announcement is made.”
MTN further stated, “The board of directors of MTN accepts responsibility for the information contained in this announcement and certify that, to the best of their knowledge and belief, such information is true, and that this announcement does not omit any facts that would make any of the information false or misleading or would be likely to affect the importance of any information contained in this announcement.”
Telkom’s share price jumped 5 percent in early trading on Monday morning, while MTN gained almost half a percent.
African Rainbow Capital-owned Rain announced in August that it had submitted a merger proposal to Telkom’s board.
The data-only provider, however, was forced to rescind its announcement to merge with Telkom.
The announcement of a planned merger between Telkom and Rain was taken to task by the Takeover Regulation Panel (TRP) and was termed as unlawful.
The TRP reports to the Minister of Trade and Industry. It regulates transactions that involve public companies.
The TRP then said that the merger announcement was sent without its approval and ordered Rain to withdraw their statement.
BUSINESS REPORT