In a cautionary announcement on the Johannesburg stock exchange, MTN said, "shareholders are advised to continue to exercise caution when dealing in the company's securities until a further announcement is made."
The company has made the cautionary announcement following it being approached by the Reliance Communications with regards to a potential business combination between the two.
"MTN has agreed to enter into exclusive negotiations for a period of up to 45 days in respect of such potential combination. There is no certainty that these discussions will result in a transaction, " the company said.
The scrip was trading at down 7.2 per cent at 144.70 South African rands on the Johannesburg Stock Exchange in the morning trade.
MTN shares had dropped by 0.5 per cent on Friday to 156.2 South African rands, pulling the company's market capitalisation to close to 290 billion rands ($37.9 billion). The share price had risen to a high of 160 rands amid talks with Bharti, giving it a market capitalisation of close to $40 billion.
From the time when MTN and Bharti first disclosed being engaged in talks for a possible deal earlier this month, the shares of South African firm had gained by over 20 per cent