MTN stock climbs as deadline draws near

Zweli Mokgata

Zweli Mokgata

The deadline for talks between MTN and India's Reliance Communications may need to be extended, amid speculation that a deal has not been struck yet.

MTN's share price jumped by more than five percent yesterday, a day ahead of the end of its closed period of exclusive talks with Reliance Communications.

Reports yesterday that Reliance Communications had offered to meet Reliance Industries further sealed the case for extending the deadline.

The two companies have been locked in negotiations for a potential merger for the past 45 days.

The talks took a turn last month when Mukesh Ambani, brother of Reliance Communications' chairman Anil, claimed that he had the right of first refusal to buy Reliance Communications.

At the end of last week, Mukesh wrote to his brother to request a meeting that could prove a prelude to court action next month.

A source close to Reliance Communications said yesterday the company was prepared to meet with Reliance Industries in the week of July 14 "to clarify any doubts".

Rajay Ambekar, Cadiz Assent Management ICT analyst, said: "They will probably extend it, but this time it could be just an ordinary cautionary announcement which would be extended if the need were there." - With Reuters