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South Africa: Telkom shares drop after MTN acquisition report

MTN and Telkom sue South Africa regulator over Covid-19 spectrum

Reports from South Africa indicate that despite a weekend report of an approach by MTN Group, Telkom shares were trading lower on Monday, implying investors don’t believe a deal is likely or imminent.

On Sunday, Bloomberg News reported that MTN had recently approached Telkom about a possible deal, citing sources “familiar with the matter”. It did not say when exactly this approach took place.

Other reports said MTN Group Chairman Mcebisi Jonas has been agitating for the deal to happen, though there is skepticism that an acquisition would get past the Competition Commission or communications regulator ICASA as it could be seen to lessen competition in South Africa’s telecommunications industry.

Telkom shares were trading down by 4.6% to R43.40 at 11.22am in Johannesburg after earlier falling as low as R53.10; MTN was up about 2%, near levels last seen six years ago.

Telkom is due to report its interim results on Tuesday.

The company has been one of the best-performing shares on the JSE this year, climbing by more than 80% year to date. MTN has added an astonishing 173% in the same period while Vodacom has added 13%. Blue Label Telecoms, which owns 45% of Cell C, has risen by 38%.



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