The negative market reaction came in thick and fast. Telkom’s shares fell by as much as 24% on Wednesday, wiping R6.9-billion from its value on the JSE. And MTN’s share price fell by as much as 4%, with the telecommunications giant joining the ranks of the biggest share losers of the day.
In late September, Rain tabled a formal proposal to merge its operations with that of Telkom. The potential Rain-Telkom merger would create a telecommunications company with enough scale, radio frequency spectrum , and network infrastructure to challenge MTN and Vodacom. The selling point for a Rain-Telkom merger is that both companies would pour more capital and investments into rolling out new-age and high-speed data services such as 4G and 5G.
“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,” Telkom added.