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09 Sep 2009 17:54
Indian cellphone company Bharti Airtel denied it had reached an agreement with South Africa’s MTN on a multibillion-dollar share and cash swap.
Bloomberg reported earlier on Wednesday the two companies had reached a $24-billion preliminary agreement, with Bharti sweetening its bid to buy 49% of MTN by raising the cash portion of its offer.
“We would like to categorically deny that any such agreement has been reached between the two companies,” Bharti Airtel said in a statement.
“The discussions are still on. As and when there is any development, we would be happy to share the same with the media,” it said.
An MTN spokesperson declined to comment on what she said was market speculation.
Two sources familiar with the talks said they had not heard a deal had been agreed.
However, another person familiar with the talks said that while no deal had been finalised, the magnitude of the numbers mentioned in the Bloomberg report was “about right”.
The South African rand gained on the report the two companies are nearing a deal, climbing to a fresh 13-month high, before reversing gains after the denial.
The two companies last month extended exclusive talks about a planned tie-up that may yet lead to a full merger.
An earlier planned tie-up collapsed over sensitivities over who would control what, and the new deal—in which both companies will hold a large stake in each other’s businesses—seems crafted to avoid a repeat.
Under the proposed deal, Bharti would consolidate MTN’s business and hold 49% in its South-African rival.
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