Telenor may drop offer for stake buy in Unitech arm

Telenor ASA, the biggest Nordic telephone company, may withdraw plans for a 12 billion Norwegian- krone ($1.72 billion) rights offer to finance an acquisition in India after investors slammed the proposal.

Telenor hired Deutsche Bank AG to seek alternatives to a planned stock sale, the Fornebu, Norway-based company said today in a statement. Telenor said it may still proceed with the rights offer.

Chief Financial Officer Trond Westlie said last week investors favour a reduced dividend to finance the purchase, and that Telenor will decide by mid-January whether to go ahead with the rights offer. Telenor dropped 26 per cent on October 29 in Oslo, the most since 2000, after saying it will purchase a 60 per cent stake Unitech Wireless and pay for it with a stock sale.

Telenor rose as much as 2.35 kroner, or 6.8 per cent, to 37.15 kroner in Oslo and traded at 36.45 kroner as of 9:46 am local time. The stock has dropped 72 per cent in a year. The firm is paying $1.07 billion for the stake in the Unitech arm.