South Africa's MTN in talks on potential deal

South Africa's MTN Group said it was in talks about a potential deal, a day after a banking source told Reuters the company was considering raising about $5 billion to buy Orascom Telecom assets.                                            

MTN, Africa's biggest mobile phone operator by subscribers, said in a statement on Friday it had entered into discussions that might have a material impact on its share price but that the talks may not lead to a transaction.                                           

It gave no further details and no one at the company was immediately available for comment.                                           

Trade of the Orascom's global depositary receipts were suspended in London pending a further announcement.             

The source told Reuters on Thursday that ownership of Orascom's Algerian unit, Djezzy, would likely change hands in the event of a deal with Egypt's Orascom, and that MTN might also buy some other, smaller African businesses.                                            

An Orascom spokeswoman in Cairo said in an e-mailed response that the company had no comment on MTN's announcement.                                           

The development comes after former MTN suitor Bharti Airtel's said late last month it was expanding its presence in fast-growing Africa by acquiring the assets of Kuwaiti telecom Zain on the continent.                                           

"We all know that (MTN) are always looking at things to acquire," said one Cape Town-based analyst who declined to be identified.

"This obviously represents an opportunity for them. We really just have to see what price they pay (and) how they structure the deal," the analyst said.                                           

Shares of MTN were flat as of 0757 GMT, roughly in line with Johannesburg's Top-40 index.