RCom shares up on deal talk, MTN denies | business | Hindustan Times
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RCom shares up on deal talk, MTN denies

business Updated: Jun 03, 2010 22:36 IST
HT Correspondent
HT Correspondent
Hindustan Times
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Reliance ADA Group (ADAG) chairman Anil Ambani is set to fly out to Johannesburg on Sunday, and the timing of his visit has fanned speculation that the visit is aimed at kickstarting discussions for a possible merger deal between his firm Reliance Communications and South Africa’s leading telecom company MTN, which could be eyeing RCom again after a failed marriage with Bharti Airtel.

RCom shares zoomed 6. 4 per cent to Rs 164.5 on Thursday. An MTN spokeswoman, however, denied talks with RCom. “That's not true,” Nozipho January-Bardill told Reuters.

"If we were talking to Reliance we would have told the market,”she added. Sources, who did not wish to be identified, confirmed that Ambani would be travelling to Johannesburg on Sunday. An ADAG spokesperson refused comment.

Negotiations two years agobetween the two companies had hit a dead-end after Reliance Industries Limited (RIL) controlled by Anil’s estranged older brother Mukesh reportedly invoked the right to refusal clause contained in one of the non-compete deals inked by them in 2006.

This, analysts who did not wish to be identified, said led to a break-down of negotiations that were centered around an equity swap deal between RCom and MTN.

About 10 days ago, the two warring brothers had decided to do-away with the non-compete clauses offering each other more flexibility.

Abu Dhabi's Etisalat said on Wednesday it was looking to buy a stake in an Indian mobile operator, but did not disclose any names, triggering speculation about a possible strategic deal with RCom.

“The company has been receiving various proposals from time to time from reputed international telecom companies expressing interest in acquiring a strategic equity stake in Reliance Communications,” RCom said in a regulatory filing on Wednesday. It said the company routinely evaluated such proposals, without confirming or denying the talks.