Talks between Bharti Airtel and South Africa’s MTN are unlikely to culminate in a deal by the September 30 deadline. Sources in the know told FE on Tuesday that’s because of their failure to reach agreement on key aspects—including the vexing issue of pricing—of the cash-cum-swap deal, estimated to be around $23 billion.

Matters were further complicated by markets regulator Sebi’s Tuesday clarification of voting rights on depository receipts, the vehicle which the complex MTN-Bharti share swap is to take. Sebi chairman CB Bhave declined to comment on the Bharti-MTN deal and whether the revised norms would require MTN to make an open offer if it is issued GDRs with voting rights.

For its part, a statement issued by Bharti on the subject said, “We can confirm that the structure under discussion with MTN will be fully compliant with the laws in both the countries. All relevant approvals, including exemption from open offer from Sebi (if required), would be sought at an appropriate time.”

The sources said that instead of extending the talks a third time, both sides are likely to initial a memorandum of understanding and thrash out the details later. It is hoped that this would keep the momentum of the discussions going, while mollifying stock markets in both countries expecting a September 30 deal. The announcement of the MoU is expected after the MTN board meets on September 27.

By then, some clarity is expected on the crucial subject of dual listing, the absence of which in India is at worst being seen as a deal-breaker, and at best a reason for wary MTN shareholders to hold out for more cash. The South African government also sees dual listing as a way to ensure MTN retains its individual identity, even after a deal with Bharti is signed.

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