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MTN Going Back To Bharti...

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Anil Ambani (L) with elder brother Mukesh

The reports about such speculations are surfacing in the South African and London media even after MTN and RComm extended their exclusivity agreement for negotiations from July 8 till July 21.

"The original, less controversial merger with Bharti Airtel could be back on the cards," a report in South African daily The Times said, adding that this could be due to MTN wanting a "clean deal".

"Media frenzy surrounding MTN's proposed merger with Reliance Communications is probably creating a useful smokescreen to allow it explore opportunities in other countries well away from the spotlight," another South African daily Business Day reported.

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RComm and MTN had first announced the start of their exclusive talks on May 26 after the South African firm's talks fell apart for a possible deal with Sunil Mittal-led Bharti Airtel, RComm's rival telecom operator in India.

The Times, in its report, said that MTN's board, which met last week, might "well conclude that the deal (with RComm) has become too complicated and decide that it does not want its shareholders held hostage to an unwieldy legal battle in another jurisdiction". The report quoted a Vunani Securities analyst as saying that MTN would want to take on a "clean" deal.

"MTN does not want to take on baggage. If this deal goes through, they will want another extension. Another possibility is that this extension is just a strategy to buy time to limit the damage already done," the analyst told the Times.

Noting that a withdrawal from the talks might not be "straightforward", the report quoted unnamed sources close to the development as saying that "Bharti is likely to be more flexible than Reliance (Communications)".

The Times report added that "MTN will definitely strike a deal -- not necessarily with Reliance -- because the SA company is on the acquisition trail." The daily further quoted a Renaissance Asset Management director as saying that Reliance deal would "crumble" and "only if the Ambani brothers sort out their issues in good time will a deal be possible".


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