MTN Group’s talks to acquire domestic competitor Telkom South Africa were reportedly placed on hold after a rival approach for a tie-up by Rain Networks put a spanner in the works.
Bloomberg reported negotiations about the price and other terms had stalled, but added MTN had not yet completely abandoned the deal.
MTN’s hesitancy to push forward appears to be related to Telkom getting a rival approach from Rain Networks, which made a play in August.
The smaller rival offered to sell itself to Telkom in exchange for shares.
Telkom subsequently issued a statement on the stock exchange indicating it would consider an offer or formal proposal from the company, while adding it was still in talks with MTN.
Bloomberg added MTN could resurrect merger talks if Telkom clarified its position on Rain Networks’ proposal.
A tie-up between MTN and Telkom would go some way to bridging the gap with Vodacom, the country’s largest operator by subscribers.
However, should the deal progress, it is likely to face stringent regulatory scrutiny because it would reduce the number of major operators from four to three.