Shares in India's Reliance Communications (RLCM.BO: Quote, Profile, Research) jumped as much as 7 percent on Wednesday with investors speculating a deal with South Africa's MTN Group (MTNJ.J: Quote, Profile, Research) had fallen through.
Reliance Communications and MTN had set themselves a July 8 deadline for exclusive talks on a business combination which might create a top-10 global telecoms firm but the deadline passed with no statement from either side.
"Investors are speculating that the deal is off," said Kevin Trindade, a telecom analyst at brokerage KR Choksey.
"Of course, the company could go back and talk some more to MTN, but at this point, an extension of the exclusivity period looks unlikely. So at least there's less uncertainty."
Shares in Reliance Communications, which had fallen 27 percent from the start of talks in late May, were up 5.3 percent at 437.30 rupees at 0509 GMT in a Mumbai market that was up 3.2 percent.
A source with knowledge of the matter had said on Tuesday the talks may continue but may not be exclusive any more. The market had expected Reliance Communications might issue a statement before trading started but Reliance officers were unavailable for comment.
Reliance Communications began exclusive talks with MTN on May 26, taking the place of larger rival Bharti Airtel Ltd (BRTI.BO: Quote, Profile, Research) who called off talks after failing to agree on a deal structure.
Media reports and a source had indicated the two firms were aiming at a reverse takeover, with a share swap that would give the Anil Dhirubhai Ambani Group the largest shareholding in MTN and make Reliance Communications a subsidiary of MTN.
That triggered a claim of right of first refusal from Mukesh Ambani, the estranged older brother of Reliance Communications chairman Anil, and who runs Reliance Industries
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