Telkom

Rain, the data service provider, is requested to retract their announcement to propose a merger with Telkom. PHOTO: MyBroadband

Rain in trouble for announcing possible Telkom merger

Data provider Rain has gotten into trouble for their announcement on Telkom and ordered to retract it by the Takeover Regulation Panel.

Telkom

Rain, the data service provider, is requested to retract their announcement to propose a merger with Telkom. PHOTO: MyBroadband

Data network provider Rain announced it will request Telkom to kick MTN to the curb and merge with them instead. But this did not sit well with the Takeover Regulation Panel (TRP) as the news broke without their knowledge.

RAIN REQUESTS A MERGER

Rain said on Thursday that it has made a formal request to present to the board of Telkom a merger proposal to combine the two companies.

The data provider says this merger will create a 5G powerhouse to strongly compete with “telecommunication duopoly” in the country.

Rain said its proposal to Telkom would be an alternative offer to that made by mobile service provider MTN Group.

MTN has been in talks last month to buy Telkom in a stock or cash-and-shares deal.

“It is a logical alternative to simply selling to MTN and would also be consistent with the pro-competitive policies of the government.”

Rain chairperson Paul Harris

ALSO READ: Telkom and Rain merger talk gathers steam

TELKOM HAS RECEIVED NO COMMUNICATION FROM RAIN

But Telkom has not received any offer or proposal from Rain regarding the merger.

In a response to Bloomberg on Thursday afternoon, the telecommunications company said it notes the public announcement by Rain for a proposed merger.

Telkom
Telkom has been in talks with MTN for a merger. PHOTO: Mapio.net

“Telkom notes the media statement by Rain, titled ‘Rain proposes merger with Telkom’. Telkom can confirm that no offer or proposal has been received.”

RAIN REQUESTED TO RETRACT STATEMENT OF MERGER

The Takeover Regulation Panel (TRP) is gravely concerned about Rain’s announcement regarding a potential offer to merge with the telecommunications giant.

The Panel says this announcement was made without their prior approval. This is required in terms of Regulation 117 of the Companies Regulations.

“Furthermore, the announcement was issued notwithstanding the TRP’s instructions to Rain that no such announcement should be made without the prior approval of the TRP. Accordingly, the publication of the announcement by Rain is unlawful.”

Rain has therefore been instructed to retract the announcement.

“In the circumstances, all parties, that is, shareholders and the market are advised to disregard the announcement.”

ALSO READ: MTN in talks to purchase Telkom as shares soar after the announcement