This morning reports have confirmed that MTN is in discussions with Telkom over a purchase.

While an official acquisition is still in the offing, both telecommunications companies are keen to meet at the bargaining table, but it still remains to be seen if a deal can be hashed out, along with when such an acquisition would take place.

“Discussions are at an early stage and there is no certainty that the transaction will be consummated,” both companies noted in communications to the JSE via TechCentral.

For now though, both organisations have informed respective shareholders of the deal, with Telkom’s share price rising rapidly by as much as 30 percent on the back of the news. The rise makes sense, given that a sale would see two of the three largest telecommunications companies becoming one.

At the time of writing, it is unclear how the purchase would work, but we are told that a combination of stock and cash could be used to complete the deal.

“Shareholders are advised that MTN and Telkom SA SOC Limited have entered into discussions in relation to MTN acquiring the entire issued share capital of Telkom in return for shares or a combination of cash and shares in MTN,” Telkom confirmed in a statement to MoneyWeb.

That said, given that Telkom is partially state-owned, along with the fact that no precise figure has been bandied about yet, means the purchase will not be a straightforward process.

“The transaction, if concluded, may have a material effect on the price of the company’s securities. Accordingly, shareholders are advised to exercise caution when dealing in the company’s securities until a further announcement is made,” MTN added in a statement to MoneyWeb.

The dust is yet to settle so we will be monitoring this developing announcement.