RCOM shares ended up 4.1 per cent at Rs 435.20 in a firm market on Friday, adding to gains of 4.7 per cent the previous day. But the shares are down 24 per cent from late May when the talks with MTN were first announced. MTN shares closed 2.76 per cent lower at 130.30 rand, as analysts in South Africa doubted a deal was on the cards.

As per the May 26 agreement between RCOM and MTN, the latter would exclusively negotiate with the Indian company during the 45-day exclusivity period. The period was extended by two weeks on July 8 to July 21. RCOM had worked out various models for a deal and even lined up big investors including the Investment Corporation of Dubai, a sovereign wealth fund of Dubai to fund the deal.

Incidentally, the announcement came a day after RIL commenced arbitration proceedings by nominating Justice B P Jeevan Reddy, a former Judge of the Supreme Court of India as an arbitrator for resolution of “disputes”. RCOM said the proceedings were legally and factually unwarranted. It is also learnt that MTN was nervous about entering a deal with a legal cloud over it. RIL opposed the RCOM move on June 13 saying it had the first right of refusal whenever RCOM decides to sell the equity stake. However, this was countered by RCOM that the contentious non-competition agreement was signed between RIL and RCOM when the latter was controlled by RIL chief Mukesh Ambani in what it called a one-sided deal.

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