Telkom announced on Friday that it had received written notice from the Cell C board of directors, rejecting its non-binding takeover proposal.
"The Telkom board continues to believe the offer is a compelling proposition that would have created significant value for all stakeholders including Telkom's shareholders," it said on Friday in an update to shareholders.
Telkom confirmed it was in talks to buy the mobile network operator in mid-November, saying it had substantially concluded its due diligence.
Cell C, in a brief statement on Friday, confirmed its board has declined Telkom’s offer. The mobile operator said it will "consider all offers which takes the full value of Cell C into consideration"."Cell C was recently recognised as one of the top 30 most valuable South African brands and it remains focused on its 16-million strong customer base, its distribution channel of more than 240 stores and its valuable spectrum," it said.
"The company continues to prioritise its turnaround strategy which includes ensuring operational efficiencies, restructuring its balance sheet, implementing a revised network strategy and improving overall liquidity."
According to Bloomberg, a tie-up between Cell C and Telkom's mobile-phone division would create a business with about 22 million subscribers