Rain still discussing Telkom merger bid
According to a major shareholder in Rain, African Rainbow Capital (ARC), the company is still debating the Telkom bid that it was forced to retract in August but will have something to present before the end of this month.
Fin24 reports that due to ARC’s view that investing in fibre results in low returns, it may only be targeting Telkom’s mobile business.
The co-CEO of ARC, Johan van Zyl, specifically stated during the group’s financial results that it was committed to entering the mobile market.
Van Zyl said that Rain had started the necessary work to branch into the mobile network business.
Its initial plan was to do it alone and it will continue to press ahead regardless of whether it merges with Telkom or not.
Were it to join forces with Telkom then Van Zyl believes that Rain’s valuation can accelerate from about R20bn to R50bn in no time.
He estimated that by merging the two businesses, Telkom would not need to catch up on its 5G offering while in turn Rain will lead the market through its number of towers.
Article disclaimer: While we have made every effort to ensure the accuracy of this article, it is not intended to provide final legal advice as facts and situations will differ from case to case, and therefore specific legal advice should be sought with a lawyer.
