Norway's Telenor is interested in buying larger Swedish-Finnish rival TeliaSonera after France Telecom's bid was rejected as too low, a member of TeliaSonera's board said.
Norway's industry minister declined to comment on the report but shares in majority state-owned Telenor sank for a second consecutive day on growing speculation over a TeliaSonera bid, a Reuters report also said.
'We know Telenor is interested, that much we know,' TeliaSonera board member and union leader Elof Isaksson told Norwegian daily Dagens Naeringsliv.
He described France Telecom's â‚¬26.5 billion (US$41 billion) bid as 'ridiculous' and 'uninteresting.'
TeliaSonera's management and the Swedish government, which owns 37.3% of the shares, both rejected the bid.
Telenor, 54% owned by the Norwegian government, has declined to answer questions about TeliaSonara for days, saying its official policy was not to comment on speculation.
'No comment. I will not contribute to speculation with regards to listed companies or where the government is a shareholder,' Trade and Industry Minister Dag Terje Andersen told Reuters on Tuesday.
'But I do understand why you ask,' he added.
The chairman of the industry committee in the Norwegian parliament, Ola Borten Moe, told Reuters on Monday that Telenor and TeliaSonera would be a good industrial pairing. Moe said it was up to Telenor to evaluate its options and initiate talks.
Analysts said that Moe's comments showed Norway would probably not actively push for Telenor to take over TeliaSonera but would not mind if a tie-up took place, even if it meant that it had to take part in a capital increase to fund it.