MTN Group’s talks to buy Telkom have stalled following a rival deal proposal from another telecommunications company, people familiar with the matter said.
Negotiations about price and other terms have stopped for the time being, though MTN hasn’t decided to walk away from the deal, the people said, asking not to be identified because the discussions are confidential.
MTN, Africa’s largest wireless operator, stepped back after Telkom got another approach from Rain, creating uncertainty about its proposal, the people said. Rain said in August that it had offered to sell itself to Telkom, which is partially owned by government, in exchange for shares.
Talks could restart if Telkom clarifies its position on the Rain offer, the people said.
A representative for MTN declined to comment. A spokesman for Telkom referred to the company’s statement on 4 October, which said that MTN’s proposal was still under consideration by both parties and that shareholders should exercise caution. The spokesman declined to comment further.
Read: Telkom shares plunge on news MTN talks have stalled
MTN and Telkom’s potential combination would create South Africa’s largest mobile operator by subscribers, closing the gap with rival Vodacom Group. It could also raise competition concerns, reducing the number of major mobile networks in the country to three from four, with the vast majority of subscribers controlled by the top two carriers.
Telkom shares have gained about 45% in Johannesburg trading since 14 July, the day before the talks with MTN were disclosed, valuing the company at R24.5-billion. — (c) 2022 Bloomberg LP