Rain ordered to retract proposed Telkom merger announcement
South Africa’s Takeover Regulation Panel has instructed Rain to withdraw a press statement regarding a proposed merger with Telkom.
Rain announced on Thursday afternoon that it had formally requested to present the Telkom board with a proposal to merge the two companies.
However, Department of Trade and Industry’s Takeover Regulation Panel took a dim view of Rain’s approach.
“The Takeover Regulation Panel (TRP) has noted, with grave concern, a press announcement issued by Rain proprietary limited (“Rain”) regarding a potential offer to merge with Telkom on 11 August 2022,” it said in a statement to shareholders on the JSE news service.
“We wish to inform the market that the announcement was issued by Rain without the prior approval of the TRP as required in terms of Regulation 117 of the Companies Regulations,” the panel stated.
“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.”
The TRP said Rain’s publication of the announcement is unlawful.
“Rain has been instructed to retract the announcement,” the TRP said.
“In the circumstances, all parties (i.e., shareholders) and the market are advised to disregard the announcement.”
Rain said a merger with Telkom would create a 5G powerhouse and strong third player to compete with the Vodacom and MTN “telco duopoly”.
It also said the merger offers a more pro-competitive alternative than government selling Telkom to MTN.
The African Rainbow Capital-owned operator did not give details on how its proposed transaction would be structured, saying that those particulars would need to be negotiated.
Asked for comment on the TRP’s statement, Rain said it is taking legal advice.
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