The Serbian government has rejected Telekom Austria's revised offer of €1.1 billion for a 51 per cent holding in Telekom Srbija, and has withdrawn its sale of Telekom Srbija stating that it would not sell the telecoms firm cheaply.
While expressing regret about the Serbian government's decision, Telekom Austria said the asking price of €1.4 billion was too high and, as reported by Reuters, "economically not realisable" for the group.
However, the Austrian company confirmed it would keep its offer open to the Serbian government for three months.
While a working party and the country's Prime Minister, Mirko Cvetkovic, both came out against selling the former state telco below the asking price of €1.4 billion, no guidance was provided as to the future ownership of Telekom Srbija.
The failure to reach an agreement to sell the Serbian operator now looks certain to force the government to issue Euro bonds valued at €500 million to finance its 2011 budget gap.
Telekom Austria was the only bidder for Telekom Srbija; the collapse of its offer could damage its objective of becoming the dominant operator in Central and Eastern Europe.
Telekom Austria presently has around 22 million customers across eight countries, and generated 2010 revenues of €4.65 billion.
Telekom Austria closes in on Serbian deal, ups offer
Rumour Mill: Telekom Austria unveils Serbian solution
Telekom Austria's bid for Serbian operator called an 'insult'
Rumour Mill: Russia's MTS bids for Telekom Austria