Source: Economic Times
MUMBAI: The weekend saw no let-up in the latest round of the seemingly unending and relentless war between the Ambani brothers, with both sides readying their heaviest legal artillery. After the initial shock and awe of RIL’s sudden intervention, Anil Dhirubhai Ambani Group (ADAG) officials have adopted an aggressive posture.
However, RIL has shown no signs of yielding, with company officials claiming that MTN would have to consider the legal implications of acquiring RCOM. Seemingly undeterred by the controversy, an MTN team arrived in Mumbai on Saturday to start due diligence on RCOM.
A senior ADAG executive told ET on Sunday that Reliance Industries (RIL) can make an open offer if they are keen on buying RCOM. The executive is involved in structuring the proposed $70 billion mega-merger deal between RCOM and South African telecom giant MTN.
“If they want, they can make an open offer to buy RCOM or go to court. They will not do so or go to court because they are not interested in buying RCOM; their only interest is to sabotage our efforts to create a global telecom giant stretching from Asia to the Middle East and Africa with a subscriber base of 116 million,” said the executive.
“Besides, what is hurting RIL is that if the deal goes through, EBITDA of the combined RCOM and MTN for 2009 would be Rs 45,000 crore, 50% more than RIL’s EBITDA of Rs 30,000 crore. Our deal is on track,” said the executive.
When asked for comments on RIL making an open offer to buy RCOM or going to court to enforce its right of first refusal, RIL’s official spokesperson declined to comment, saying RIL has not officially received any response from RCOM or MTN for its letter. “It’s interesting that they have not responded to us even after 48 hours. As far as MTN is concerned, their board and all bankers involved will have to take note of concerns expressed by India’s largest private sector company,” an RIL source said.
In a statement issued to media on Friday, RIL had said: “RIL, has in good faith, notified both Anil Dhirubhai Ambani Group and MTN Group of the stipulations contained in an agreement, the validity of which has never been questioned so far by ADAG.”
When asked if RCOM has received any communication from MTN seeking clarifications on RIL’s letter, the RCOM executive said: “MTN was quick enough to respond to RIL’s letter. Within a couple of hours, the MTN spokesperson had said that nothing has really changed and talks with RCOM were on as per the 45-day exclusive talks agreement.” MTN officials could not be reached for their comments.
The issue came into the limelight after RIL wrote to MTN on Thursday threatening legal proceedings to enforce its claimed right of first refusal in the Bombay High Court, in which case MTN would also be one of the defendants.
RIL’s letter to MTN was addressed to Cyril Ramaphosa,(non-executive chairman) and PF Nhelko (group president and CEO). The letter, a copy of which is available with ET said: “As you will note, we have already notified to ADAG that we shall adopt legal proceedings against them in the Bombay High Court, in which we shall necessarily add MTN as one of the defendants….Please note that any agreement of the nature contemplated above between MTN and ADAG will result in MTN procuring a breach of the agreement, which shall entitle RIL to make a claim for exemplary damages against MTN,” said the letter.
