After many months of talks, MTN has walked away from a possible merger with Telkom due to its flirting with the possibility of buying Rain itself. As a result, Telkom’s share price plummeted nearly 25% after the news hit the market.

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“MTN terminated discussions in relation to the MTN proposal on 18 October as Telkom was not in a position to provide MTN with assurances around exclusivity,” Telkom said in a statement to investors shortly after markets opened on Wednesday. “Discussions were at an early stage and had not progressed to due diligence nor had a binding offer been received by the Telkom board of directors,” Telkom said.

Earlier this month it was reported by Bloomberg that talks had stalled, accompanied by a Sens statement from Telkom in which it said the board had received a proposal to acquire Rain.

After this news broke, MTN said it had written to Telkom’s board seeking clarity about any discussions with Rain. “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.

Any potential deal between the two telecommunications companies would still have taken many months, if not years, had it gone to completion. It is a deal fraught with red tape and hoops to jump through, because Telkom still has a large shareholding by the government. It was wholly state-owned, but privatised years ago as the national government was trying to raise funds amongst budgetary pressures.

What made Telkom’s announcement of the Rain talks peculiar was the fact that it was announced two weeks after the proposal was reportedly received. Rain wants Telkom to acquire it, and on paper the deal would make a lot of sense.