Although two major PacNet shareholders had already indicted a willingness to sell their stakes, the signs were that the Infocomm Development Authority of Singapore (IDA) was still reluctant to give the deal the go-ahead, as the merger might be deemed anti-competitive.
PacNet's parent, SembCorp Industries Ltd, which owns 42 percent of the ISP, was said to be ready to sell its entire stake to SingTel, although PacNet claimed that it had not been notified of such a move. Another shareholder, MediaCorp's SIM Ventures, was also believed to be ready to sell its 14 percent stake.
However, SingTel gave up the chase when it failed to get a "reasonable sense" of the regulator's willingness to let such a deal pass, The Straits Times reported citing sources.
SingTel is Southeast Asia's largest phone company, and runs its own ISP unit, SingNet, which is the largest ISP in the island. Nasdaq-listed PacNet has 380,000 subscribers in the region.
IDA spokesperson Dulcie Chan would not comment on rumors that it was blocking SingTel's proposed PacNet bid for PacNet, saying that the regulatory body does not "as a matter of practice, reveal the details of any confidential discussion with any operator on any issue."
Meanwhile, Chan said today that no formal proposal has been submitted to the regulator.
On their part, SingTel, SembCorp and PacNet all refused to comment on "rumors and speculation."
A SembCorp spokesperson added: "We have made known our intention to sell our stake (in PacNet) to a strategic partner and that intention has not changed."