MTN Group called off talks to acquire domestic competitor Telkom South Africa citing an inability to gain assurances around exclusivity, an apparent reference to a competing interest from Rain Networks.
Telkom revealed the collapse of its talks with MTN in a stock market statement today (19 October).
The operator stated its discussions with MTN had been “at an early stage and had not progressed to due diligence, nor had a binding offer been received by the Telkom board of directors”.
It was reported last week that negotiations about the price and other terms had already stalled. MTN was apparently unsettled by a rival approach from Rain Networks, which made a play for Telkom in August.
The smaller rival offered to sell itself to Telkom in exchange for shares.
It’s not clear what the next steps will be. Telkom merely indicated it continues to “execute its strategy to unlock value for shareholders” and will provide an update to the market on progress in due course.
A representative for MTN told Bloomberg the company would issue a statement shortly.
Any tie-up between MTN and Telkom would have gone some way to bridging the gap with larger rival Vodacom.
However, a deal would have faced stringent regulatory scrutiny because it would reduce the number of major operators from four to three.Subscribe to our daily newsletter Back