On Monday, MTN and Telkom confirmed that they are still in takeover negotiations.
Previously, the companies said their negotiations were “at an early stage” and that there was “no certainty the transaction will be consummated”.
In an update on Monday, the companies confirmed discussions are still in progress “which, if successfully concluded, may have a material effect on the price” of their shares.
Shareholders were advised to continue to exercise caution when dealing in their shares. Telkom’s share price jumped 5% in early trading on Monday morning. MTN gained almost half a percent.
Last month, MTN approached Telkom’s board with a buyout bid – which will consist of cash or a combination of cash and shares.
Meanwhile, data-only network provider Rain wants a merger with Telkom. But it has been forced to withdraw its media announcement about the move, by the Takeover Regulation Panel (TRP), which deemed it as unlawful. Rain said it would still make a bid.
Meanwhile, the black investment group Toto Consortium has made a R7-billion bid to buy government's 40.5% stake in Telkom.
MTN’s proposed takeover, if concluded, would change the face of the local telecommunications industry, expanding MTN’s reach into fibre technology.
It would also come under intense scrutiny from competition authorities and other interested stakeholders in the sector. MTN, which is a pan-African mobile phone operator, is currently the country's second-largest service provider after Vodacom. Telkom has become the country's third largest cellular network provider after entering the market in 2010.
The company currently has a roaming agreement with MTN, a partnership signed in November 2021, which allows its customers to access MTN South Africa's 2G, 3G and 4G services.
Apart from government’s 40.5% stake of Telkom, the Public Investment Corporation (PIC), which invests on behalf public servants pension funds, holds around 13%. The PIC also has a 22% stake in MTN.