While the battle between the Ambani brothers ensues, over the legality of RIL?s first right of refusal over any equity dilution in Reliance Communications, South African Telecom giant MTN?s market capitalisation is fast eroding from the high of $40-billion it had reached amid talks with Bharti Airtel, to a little more than $29 billion, which is lower than what it was before it started negotiation with Indian companies.
The share price of South Africa?s largest telco had risen to a high of 160 rands amid talks with Bharti, giving it a market capitalisation of close to $40 billion in May, before which the company?s share was being traded at nearly 130 rands a share. Before the company?s negotiations with Bharti were made public, the company?s market capitalisation stood at near $31 billion.
MTN shares had sky rocketed by almost 60% in the last one year, as a result of both strong financial results and mostly due to media reports suggesting that the giant was in talks of equity dilution and acquisitions with foreign entity.
The company?s scrip has lost as much as 3.94 rand, or 2.8% to 135.01 rand, the deepest dive in the last one week. The stock traded at 135.64 rand at 9:39 am on Tuesday, valuing the company at 253 billion rand ($29.3 billion).
Last week Reliance Industries Ltd had put a spanner in the prospective MTN Rcomm deal by dashing a legally worded letter to MTN, claiming that RIL had the first right of refusal in any deal involving equity dilution in Rcomm and if MTN went ahead with its deal with Rcomm then it would be entangled in a legal suit with RIL. Rcom countered and quoted a government?s decision along with a few judgements of the Supreme Court to say that any such agreement even if existed was null and void.
