The news of extending the 45-day exclusivity agreement from July 8 boosted the share prices of both MTN and RCOM. While RCOM shares settled with a gain of about six per cent on the Bombay Stock Exchange, MTN also appreciated by more than one per cent on the Johannesburg Stock Exchange.
RCOM and MTN had agreed to continue their negotiations for a potential business combination, and extended the period of exclusivity until July 21, RCOM said in a statement. “It is to be noted that there is no certainty either on completion, or the timing of the said proposal. In the meantime, shareholders are advised to exercise caution in their dealings in the companies’ securities dealings until a further announcement is made,” RCOM said.
RCOM and MTN had first announced start of a 45-day exclusivity period on May 26, which ended on Tuesday. The deal has been hit with uncertainties ever since Mukesh Ambani-led RIL threatened legal action against RCOM and MTN if a potential deal between the two breached its first right of refusal in a majority stake in the Anil Ambani group firm. However, the Anil Ambani group has been contesting these claims, saying they are legally and factually untenable and misconceived.
MTN is likely to convene a board meeting tomorrow to discuss the potential amalgamation of the two companies. According to sources MTN could hold a board meeting to discuss the status of talks.
1 per centRise in MTN shares on Johannesburg Stock Exchange. They settled at 129.9 rand in mid-day trade
6 per centRise in RCOM shares on BSE. They closed at Rs 440.95
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