MTN, which has seen about 60 per cent jump in its shares in the past one year on speculations of a possible buyout, advised its shareholders to exercise caution while dealing in its shares.
NEW DELHI: South African telecom firm MTN, which has seen about 60 per cent jump in its shares in the past one year on speculations of a possible buyout, on Monday advised its shareholders to exercise caution while dealing in its shares.
In a cautionary announcement on the Johannesburg stock exchange, MTN said, "Shareholders are advised to continue to exercise caution when dealing in the company's securities until a further announcement is made."
The company has made the cautionary announcement following it being approached by the Reliance Communications with regards to a potential business combination between the two.
"MTN has agreed to enter into exclusive negotiations for a period of up to 45 days in respect of such potential combination. There is no certainty that these discussions will result in a transaction," the company said.
The scrip was trading at down 7.2 per cent at 144.70 South African rands on the Johannesburg Stock Exchange in the morning trade.
MTN shares had dropped by 0.5 per cent on Friday to 156.2 South African rands, pulling the company's market capitalisation to close to 290 billion rands ($37.9 billion). The share price had risen to a high of 160 rands amid talks with Bharti, giving it a market capitalisation of close to $40 billion.
From the time when MTN and Bharti first disclosed being engaged in talks for a possible deal earlier this month, the shares of South African firm had gained by over 20 per cent -- adding close to 10 billion dollars to the company's market value to near $40 billion.
The MTN stock was trading nearly 130 rands a share before the reports started surfacing about a potential acquisition by Bharti Airtel. At that time, the company's market cap stood at near $31 billion.
MTN shares have surged by close to 60 per cent in the past one year, partly due to robust financial results of the company, but mostly on the back of consistent rumours about its acquisition by a foreign entity.
Prior to the latest round of talks with India's Bharti, the stock had earlier peaked after China Mobile was rumoured to be preparing a bid for MTN. However, those rumours proved to be a damp squib.
Even amidst Bharti and MTN being engaged in talks, rumours had surfaced about rival bids being launched by other entities, including India's Reliance Communications, China Mobile, Indian-origin Arun Sarin-led British telecom giant Vodafone, Egypt's Orascom, UAE's Etisalat, Germany's Deutsche Telekom and Russia's Vimpelcom.
However, all these rumours came to nothing with all the rumoured suitors mostly denying any such move.
){kind=small}
){kind=small}
){kind=small}
){kind=small}
){kind=small}
){kind=small}
){kind=small}
){kind=small}
){kind=small}
){kind=small}
){kind=small}
){kind=small}
){kind=small}
){kind=small}
){kind=small}
){kind=small}
){kind=small}
){kind=small}
){kind=small}
){kind=small}
){kind=small}
)
){kind=small}
){kind=small}
)
)
)
)
)
){kind=small}
){kind=small}
){kind=small}
){kind=small}
){kind=small}