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MTN, Bharti Airtel likely to re-start talks

MTN and Bharti Airtel may seek to resolve regulatory hurdles and restart talks after scrapping a proposed $23 billion merger on Wednesday. Bharti and MTN, which abandoned negotiations for the second time in two years, left the door open for a possible revival of the deal after the deadline for exclusive talks ended on Wednesday.

“With time I am confident we’ll overcome any regulatory hurdles and achieve our long-term objectives,” Azmi Mikati, CEO of M1 Group, MTN’s second-largest shareholder, said in an e-mail. “There was a lot of hard work invested in trying to combine these two entities into what would have been the leading emerging markets mobile operator.”

Bharti would be working behind the scenes to revive the MTN talks,” said Nishna Biyani, an analyst at Mumbai-based Prabhudas Lilladher Pvt. “It’s not like this is the end of the show for Bharti,” said Biyani, who rates Bharti “accumulate.” Bharti said in an e-mailed statement on Wednesday that it wanted an “opportunity” to revive the deal. MTN said the companies were not “able to conclude a transaction within the economic, legal and regulatory framework within which both companies operate.”

South Africa’s treasury said the talks ended on a mutual agreement to disengage. A transaction with Bharti “is not dead and buried by any means,” said Rob Forsyth, a fund manager with Investec Asset Management, which holds MTN stock. “These regulatory issues can take a long time. It doesn’t mean they can’t work behind the scenes, just means exclusive talks are over.” South African Treasury said government didn’t block the deal.

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