MTN still interested in buying Telkom

MTN Group recently hinted strongly that it could be interested in returning to discussions to buy the partially state-owned telecommunications operator Telkom.

MTN issued a statement, on the same morning that the country’s third-biggest mobile operator Telkom published its annual financial results for the 12 months to end-March, reporting a major loss, in which it said that its rival is a “business with good assets”.

Telkom’s revenue increased by 0.9% from R43.138 billion, up from R42.756 billion the year prior, with earnings before interest, taxation, depreciation, and amortization (EBITDA) dropping 19.8% to R9.5 billion from R11.9 billion before.

According to Telkom’ summarised consolidated statement of profit and loss, it made a profit of R346 million over the period compared to R2.6 billion the year prior.

However, it noted that certain financial information presented in the results constitutes pro forma financial information based on assumptions on future performance and hypothetical data.

MTN remains of the view that the offer made in July 2022 would have been good for shareholders of both companies and broader stakeholders. There is no offer or official discussions at the moment.

MTN

The statement comes after MTN last year walked away from early-stage talks about a possible transaction after Telkom’s board decided to entertain an offer from wireless broadband upstart Rain. The Rain talks never led anywhere.

More recently, reports have said Telkom has received a proposal from a consortium that includes its former CEO, Sipho Maseko, and Mauritius-based Axian Telecom about buying a majority stake in the company.

Telkom’s shares reversed earlier losses on Tuesday after MTN’s remarks, rising from being more than 6% down on the back of the annual results to be up almost 2% gain in Johannesburg around lunchtime