There are indications that the 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.

Read also Telkom shares rise after company says MTN talks continue

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.

Read also How Rain Disrupted Acquisition Talks Between Telkom and MTN

“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.

Kelechi Deca

Kelechi Deca has over two decades of media experience, he has traveled to over 77 countries reporting on multilateral development institutions, international business, trade, travels, culture, and diplomacy. He is also a petrol head with in-depth knowledge of automobiles and the auto industry

Shares in Telkom rallied on Tuesday after the company informed investors that it is still in talks with MTN Group about a transaction. Shares in Telkom firmed on Tuesday after the partially state-owned telecommunications operator informed investors that it is still in talks with MTN Group about a transaction.

In a statement issued via the JSE’s stock exchange news service (Sens) at 9.32am on Tuesday, Telkom renewed its cautionary announcement about the talks, which could see MTN buying it out in a cash- and share-based deal.

“The MTN proposal is still under consideration by both parties,” Telkom said.

MTN last week hinted it could quit its talks with Telkom after the latter’s board signalled an apparent willingness to engage a separate proposal from wireless broadband operator Rain.

Read also : MTN Nigeria Completes Issuance of N115bn Fixed Rate Bonds

Last Friday, MTN said in a Sens statement that its board had written to Telkom’s board about Telkom’s announcement, earlier that same day, that it was considering Rain’s proposal.

“A further announcement will be released by MTN, setting out its position with regards to the future of the transaction,” it said, suggesting it was prepared to walk away from the talks.

Telkom’s decision to renew its cautionary status caused the company’s shares to firm, although it was largely in line with a broadly positive JSE on Tuesday. The shares were last quoted at R48.56 each, up 2.9% on the session. They’d earlier traded as high as R49.38. 

Kelechi Deca

Kelechi Deca has over two decades of media experience, he has traveled to over 77 countries reporting on multilateral development institutions, international business, trade, travels, culture, and diplomacy. He is also a petrol head with in-depth knowledge of automobiles and the auto industry