MTN Group pulls out of talks to buy South Africa’s Telkom

MTN Group has called off talks to acquire another South African Telecom company, Telkom.

The proposed deal was to enable MTN to become South Africa’s biggest operator for mobile customers, surpassing Vodacom, the current market leader.

Telkom in a statement to investors published shortly after markets opened on Wednesday, said ongoing discussions for possible acquisition have been terminated because it could not offer assurances around exclusivity to MTN.

“MTN terminated discussions in relation to the MTN proposal on 18 October as Telkom was not in a position to provide MTN with assurances around exclusivity,” Telkom said.

“Discussions were at an early stage and had not progressed to due diligence nor had a binding offer been received by the Telkom board of directors.

“The Telkom board has a legal and fiduciary duty to consider all bonafide offers.

“Shareholders are, therefore, advised that they no longer need to exercise caution when dealing in the company’s securities.

“Telkom continues to execute its strategy to unlock value for shareholders and will provide an update to the market on progress in due course.”

Telkom’s share price plunged on the news, losing over 22 percent to trade at around R34.79.

In July, both telcos announced discussions about a potential takeover but the talks stalled after Rain, South African data-only network operator, submitted a merger proposal to Telkom.