Indian mobile-phone company Bharti Airtel denied it had reached an agreement with South Africa's MTN on their planned multi-billion dollar share and cash swap, contrary to an earlier media report.
Bloomberg said on Wednesday the two companies had reached a $24 billion preliminary agreement. But Bharti said talks between the two -- which could later lead to a full merger -- were still going on.
"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.
Bharti would sweeten its bid to buy 49 percent of MTN by raising the cash portion of its offer, Bloomberg said, citing three people familiar with the situation.
Shares in Bharti closed 3.4 percent lower at 409.85 rupees, underperforming a slightly stronger market, while MTN ended the day 1.92 percent up, outperforming a 0.7 percent weaker JSE Top-40 index.
And the South-African rand gained on the report the groups are nearing a deal, climbing to a fresh 13-month high, before reversing gains after the denial.
An MTN spokeswoman 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, a third person familiar with the talks said that the magnitude of the numbers mentioned in the Bloomberg report was "about right", but that no deal had been finalized.
Reuters reported last month that Bharti might increase its offer for a stake in MTN by between 5 and 10 percent, quoting a source familiar with the negotiations, after the two companies extended exclusive talks.
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 percent in its South-African rival. MTN would hold 36 percent in Bharti Airtel.