Anil Ambani-controlled Reliance Communications (RComm) and South African telecom giant MTN have extended their agreement for exclusive talks by another 12 days, reviving the hopes for a potential merger that would create a Rs 60,00-crore telecom giant.
RComm and MTN have agreed to continue their negotiations for a potential business combination, and have extended the period of exclusivity until July 21, RComm said in a statement. “It is to be noted that there is no certainty either on completion, or the timing of the said proposal," the statement said. RComm and MTN had first announced the start of a 45-day exclusivity period on May 26, which ended on Tuesday.
RComm is expected to use the extended period to resolve the legal tussle with Mukesh Ambani-led Reliance group. Merger talks, which had been progressing smoothly, ran into rough weather after the Reliance group wrote to RComm and MTN that it had the first right to buy any RComm shares Anil that wishes to let go of.
Stocks of the both the companies moved up sharply after the announcement of the extension. RCom shares rose by nearly 6 per cent to close at Rs 441, after an intra-day rally of over 9 per cent to as high as Rs 454 on the Bombay Stock Exchange. MTN shares also rose more than 1 per cent at 129.9 rand in mid-day trade on the Johannesberg Stock Exchange (JSE).