More Africa NewsTelkom shares plunge on report MTN talks have stalled

October 17, 2022by myles0

Shares in Telkom plummeted more than 10% in Johannesburg on Friday after a report suggested talks with rival MTN Group about a takeover had stalled.

Telkom’s share price plunged to as low as R40.01, a decline of 16.5% from Thursday’s close, after Bloomberg reported that the discussions were not advancing. The shares regained some composure and were quoted down 11.3% at R42.51 at 10.50am.

There were already signs of potential trouble for the deal at the end of September, when MTN issued a statement to investors hinting that Telkom’s apparent willingness to engage with Rain about a separate proposal could scupper the merger talks.

Bloomberg’s report on Friday, which quoted unnamed sources familiar with the situation, said that the talks between the parties had now stalled, apparently as a result of Telkom’s willingness to engage with the Rain proposal, which would see Telkom acquiring the mobile broadband upstart.

The report, quoting information from the unnamed sources, said engagements between MTN and Telkom about deal value and other terms “have stopped for the time being, though MTN hasn’t decided to walk away from the deal”.

In MTN’s statement to investors, published on 30 September — the same day Telkom said its board was considering the Rain proposal — the group said it had written to Telkom’s board seeking clarity about any discussions with Rain.

“A further announcement will be released by MTN, setting out its position with regards to the future of the transaction,” MTN said, suggesting it was prepared to walk away from its talks to buy Telkom. MTN has not updated investors on the talks since then. Telkom, however, issued a statement via the stock exchange news service on 4 October saying it was still in talks with MTN about a potential deal. 

Source: Tech Central

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