Data-only mobile operator rain has formally tabled a nonbinding proposal with information and communications group Telkom.
Telkom on Friday issued a shareholder update noting that it is evaluating the proposal.
“Telkom received a nonbinding proposal from rain on September 14, in terms of which rain proposes the potential acquisition of rain by Telkom for newly issued shares in Telkom,” Telkom said in a statement.
This follows a bid by telecommunications group MTN, which, on July 15, along with Telkom, issued a cautionary as they entered discussions over the potential acquisition of Telkom by MTN.
At the time, the parties noted that the discussions surrounding MTN’s acquisition of the entire issued share capital of Telkom in return for shares or a combination of cash and shares in MTN were at an early stage and there was no certainty that the transaction will be consummated.
This was followed shortly by reports that rain had proposed a merger with the partially-State-owned group, which, on August 12, denied that it received any offer or proposal from rain surrounding a proposed merger.
Telkom said, however, that any offer or formal proposal will be considered by the board in accordance with its legal obligations.
The Takeover Regulation Panel (TRP) issued a Sens statement ordering rain to retract its statement as it was unlawful and issued without the prior approval of the TRP as required in terms of Regulation 117 of the Companies Regulations, and advised the market to disregard the announcement of a proposed merger between Telkom and rain.
Telkom says that it is proceeding with its strategy to unlock value for its shareholders, underpinned by the view that the company’s share price does not reflect its intrinsic value.
“The Telkom board, conscious of economic and market dynamics and in accordance with its legal obligations, is considering various strategic options, including nonbinding merger and acquisition proposals received to date.
“The Telkom board is evaluating the rain proposal and is not yet in a position to express a view thereon,” it concludes.