She was denied because of a residency requirement.

The residency requirement for prospective parents is 18 to 24 months in Malawi.

“The decision came down to residency requirement and the fact that the judge believes she was being well taken care of in the orphanage,” said Zione Ntaba, a spokeswoman for the Malawi Justice Department. “For the Malawians, the fact that the child is at an orphanage, is being taken care of and is going through the school education system, that does qualify as the best interests of a child.”

Madonna has yet to say whether she will appeal the decision.

Malawi’s Director of Child Welfare Services, Penstone Kilembe, says “The adoption is going ahead. It has been at an advanced stage for some time.”

According to officials, Mercy James is from the “Mchinji Home of Hope orphanage. She has no father and mother, they both died…We finished the assessment yesterday in readiness for the courts next week.”

The reason she says she wants to adopt is so that her adopted son David can have a Malawian sibling.

Madonna and Guy reached a settlement over money and their kids: Madonna will keep most of her money but Guy will be entitled to a share of it. Their children, Rocco and David, will split time between the U.S. and London.

“[Madonna] walked away without any of his money, much to her credit,” a friend the British Press. “He has done the same.”

“He could have hugely boosted his bank balance and set himself up for life, but he already feels he has enough money,” another source said. “He also didn’t want the whole thing dragging on in the public gaze for months and months and, in any case, his priority was the children’s future.”

But a source close to the couple insists that’s not true. “He’s going to get a huge windfall, contrary to what’s being reported,” the source tells PEOPLE. “He’s getting a lot of money from the settlement. He’s not the gentleman he’s portraying himself as.”

Tuesday at Madonna’s Sticky and Sweet tour, both Britney Spears and Justin Timberlake are supposed to perform on stage with her together. Fans have been waiting for the ex’s to perform together and finally this may be there chance. Please someone get this on video!!!!

“They are going to be onstage performing with Madonna,” Ryan Seacrest said on KIIS-FM.

“If Justin and Britney end up on that stage with her…I don’t know if I’ve ever seen anything quite like that before,” Seacrest said.

Also, word is out that Madonna and Alex Rodriguez are definitely dating.

Madonna and Guy have been privately separated and she didn’t want the news to come out that they were getting a divorce until after her tour had finished. Well, we hope they work this out nicely for the kid’s sake.