RCom-MTN exclusivity deal may lapse

The agency also pointed out there was no official confirmation on the extension of the 45-day exclusivity pact signed between the two, supposed to end on July 8 midnight (South African time). A board meeting of MTN is expected to be held on Thursday, where a final decision on RCom's offer will be taken.

RCom, which, sources say had offered to pick up a 51 per cent stake in MTN through a complicated share-swap deal through which shareholders of the African company would pick up stake in RCom, had asked for an extension of the exclusivity talks for another three to four weeks.

An RCom spokesperson declined to comment on the issue. And despite speculation that MTN Group would come out with a statement after the close of the Johannesburg stock exchange, no statement was issued.

Nozipho January-Bardill, official spokesperson of MTN, said: "Whatever the decision is, it will be communicated to the stock exchange." It is expected that MTN as well as RCom will make a statement tomorrow.

Last month, Mukesh Ambani-controlled Reliance Industries Ltd (RIL) had informed RCom as well as MTN that the sale of shares in the Anil Ambani-controlled company would activate a right of first refusal clause, which was part of an agreement in a group asset split between the brothers in 2006. RCom had, however, dismissed the allegations.

Sources close to the deal, however, said Anil Ambani had changed the initial structuring of the deal, which it was discussing with MTN in order to ensure that it did not get into legal problems. Earlier RCom was planning a share swap-cum-cash deal under which it would get just under35 per cent in MTN.

However under the new structuring which was proposed, RCom had offered to pick up 51 per cent in MTN through a cash and share swap. They would keep control of RCom by virtue of being majority holders in MTN.

But considering the fact that MTN had earlier rejected a proposal by Sunil Mittal, which had offered to make MTN a subsidiary of Bharti Airtel by picking up a majority stake, it is likely, sources say, the company rejected the offer.