MTN scrip falls as Mukesh, Anil squabble
S Africa's MTN’s shares fall over 2 per cent on concern of a family feud in RComm may affect talks between the two companies.Updated: Jun 17, 2008 22:39 IST
South African mobile phone operator MTN’s shares fell over 2 per cent on Tuesday on concern a family feud in Reliance Communications may affect talks between the two companies. <b1>
On the Johannesburg Stock Exchange, MTN shares were in the red with the scrip trading 2.84 per cent down at 135 Rand in the afternoon trade.
Shares of Reliance Communications plunged nearly 2 per cent on the Bombay Stock Exchange to touch an intra-day low of Rs 525.25 in morning trade. It recovered slightly to close at Rs 530.20, down 0.92 per cent.
Reliance Industries scrip closed at Rs 2,329.20, up 1.94 per cent after touching an intra-day high of Rs 2,334.90 and low of Rs 2,262.
Market observers think the impact on the shares of RCOM would be negative only for the short term as the stock is strong fundamentally and would stabilise in few days.
“The whole thing that's keeping MTN down is the family feud on the go now at Reliance ... there’s a spanner in the works, it's probably putting a bit of pressure on the deal,” a trader at Investec Securities said.
A communication by Reliance claiming its first right of refusal to buy a majority equity in RCOM had triggered the latest round of fight in middle of Anil Ambani Group company's negotiation with South African telecom major MTN group for an estimated 70 billion dollar amalgamation deal.
While ADAG has termed Reliance’s claims as factually and legally baseless and untenable, Reliance Industries has charged the other group for “taking things out of context and misrepresent agreements between two groups” and dared Reliance Communications to make its legal position clear on Reliance’s claim on right of first refusal.
Mukesh and Anil Ambani had a public falling out in 2005 which resulted in a split in their massive business empire.