Reliance Comm shares may show little reaction
MUMBAI, July 18 (Reuters) - The start of arbitration proceedings over a claim on share rights in India's Reliance Communications Ltd (RLCM.BO) is unlikely to have a big impact on its shares on Friday, as the move was anticipated.
A feud between the billionaire Ambani brothers escalated on Thursday with older sibling Mukesh starting arbitration proceedings in a move likely to further complicate his brother's talks with South Africa's MTN Group (MTNJ.J). See [ID:nBOM61878]
Reliance Communications, India's No. 2 mobile carrier, has been in exclusive discussions with MTN since late May to create a global top-10 mobile phone carrier.
But the share ownership dispute between the estranged brothers has cast a shadow on the deal. The talks with MTN, which have been extended once, are scheduled to end on July 21.
"The arbitration was expected, and has probably been factored in," said Sandeep Shenoy, a strategist at brokerage PINC.
"So I don't think it will have a big impact on the shares."
Shares in Reliance Communications ended Thursday at 417.90 rupees, having gained 4.7 percent on the day.
While some investors may pare positions ahead of the weekend because of the uncertainty clouding the deal, some analysts were of the opinion a deal may still be done despite the latest move by Mukesh Ambani to scupper it.
"Serious interest is there ... I see a strong possibility of something happening," said Romal Shetty, head of the telecoms practice at consultancy KPMG.
"They have gone too far into each others' books and have nearly reached the last stage of talks. It will be tiring for both of them to back track."
The enmity between the brothers, two of the richest men in the world, took another twist earlier this month when a new government ally with close links to Anil Ambani called for a windfall tax on private oil refiners.
Any such move would directly hurt Mukesh's plans to have the world's biggest refinery complex in India.
For a FACTBOX on the Ambanis' split, see [ID:nBOM165594].
For more stories on Reliance/MTN, see [nBOM343381] (Reporting by Rina Chandran and Devidutta Tripathy; Editing by Ranjit Gangadharan)
