Telkom says JSE regulations prohibited it from buying the shares placed for sale by its foreign partner, Thintana Communications.
Thintana, which comprises US-based SBC Communications and Malaysia`s Telekom Malaysia Berhad, announced earlier this week that it would reduce its Telkom shareholding from 30% to 15.1%.
SBC said in a filing with the US`s Securities and Exchange Commission yesterday that it had sold half of its 18% stake in Telkom SA for about R3.58 billion in cash. The buyers were South African and international institutional investors.
The sale took place through a bookbuilt offering - a process to determine the level of demand for shares and the price of an issue. There had been some speculation that Telkom would participate in the bookbuilding to buy back at least some of the shares.
Telkom shareholders at a meeting in January did grant the group a general authority to buy its own shares in the open market.
However, Telkom says the authority does not, in terms of JSE regulations, permit it to take place in the share placement.
"Telkom will continue to consider the purchase of shares in its own capital on the open market under the terms of its existing authority," it says.
Thintana`s sale has hammered the Telkom share in recent weeks. Foreign newspapers first reported at the beginning of the month that Telekom Malaysia Berhad intended to sell its Telkom stake to raise funds for an acquisition in India.
Although the Telkom share price climbed after the group published a strong set of financial results, it has lost R11.50 since closing at R84.99 on 10 June. It ended at R73.49 yesterday, down 51c on the previous close.
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