South Africa’s Takeover Regulation Panel (TRP) advised shareholders and stock markets to ignore an announcement by data network provider Rain Networks regarding a plan to merge with Telkom South Africa, citing procedural errors in the company’s approach.
The TRP chastised Rain Networks for detailing plans for the merger without seeking prior approval, as required by South African regulations, and branded the announcement unlawful.
In addition to issuing guidance to the broader markets, the TRP also ordered Rain Networks to retract its statement.
Rain Networks issued a proposal to merge with Telkom yesterday (11 August), an apparent attempt to thwart efforts by MTN Group to agree it’s own tie-up with the South African operator.
In a separate statement, Telkom explained no offer or proposal had been received from Rain Networks and indicated it is still engaged in takeover talks with MTN.
Reuters reported Rain Networks stated its proposed merger “is a logical alternative to simply selling to MTN and would also be consistent with the pro-competitive policies of government”.
Rain Networks recently acquired frequencies in South Africa’s spectrum auction and told News 24 it is taking legal advice over the TRP’s reaction.