No extension for MTN-RCOM pact

The exclusivity agreement between South African telecom giant MTN and Anil Ambani group8217;s RCOM for negotiating a possible amalgamation deal is not being extended, a source familiar with the development indicated. There was, however, no official confirmation on the status of the 45-day exclusive agreement, which expired today, either from MTN or RCOM, which is engaged in a legal wrangle with Mukesh Ambani-led RIL.

Meanwhile, according to reports from Johannesburg shares of South African telecom giant MTN, closed the day in the red for the first time in past four trading sessions. MTN shares closed 0.6 per cent down at 128.22 rand in a weak market here, but the fall was less than a two per cent plunge in the benchmark All-Shares index of Johannesburg Stock Exchange JSE to its lowest level in about past five months. MTN shares fell ahead of an expected announcement by the company about the outcome of its exclusive talks with RCOM, which has been marred by the feud between two Ambani brothers with elder Mukesh-led RIL threatening legal action if a deal breaches its first right of refusal in a majority stake in Anil Ambani group firm. Earlier in India, shares of RCOM and RIL also ended in the red with losses of 1-3 per cent ahead of the outcome of the exclusive talks.

RCOM closed at Rs 415.40, down 1.05 per cent from previous close. During the day8217;s trade, RCOM shares had plunged about 6 per cent to Rs 395.05 over yesterday8217;s close of Rs 419.80. On May 26, RCOM and MTN had announced 45-day exclusivity agreement with MTN for negotiating a possible alliance, which is estimated to create a 70-80 billion worth entity.

Disappointment has set on shareholders of the South African telecom major over lack of clarity in the whole affair. Some had expected MTN to say the exclusivity is over, enabling it to assess other less complicated offers while it continues to engage with Reliance.