Slovenia cancels Telekom sale after sole remaining bidder pulls out

(Adds background, valuation, Cinven comment)

ZAGREB, Aug 4 (Reuters) - Slovenia has cancelled the sale of Telekom Slovenija after the only bidder, British private equity fund Cinven, withdrew its offer, the body which coordinates privatisations in Slovenia said on Tuesday.

The future of Telekom, the largest of the 15 firms earmarked for privatisation, has hung in the balance as falling profits and the risks from court cases against Telekom for allegedly abusing its dominant market position have complicated the negotiations.

"SDH has recived notification from Cinven that they no longer want to pursue negotiations to conclude the sale," SDH said on its website.

SDH said it will look at options for the 72.75 percent stake in Telekom. Slovenia's largest telecoms firm is valued at around 673 million euros ($738.15 million).

Cinven said in a statement the decision to withdraw had been taken "following a detailed review of the investment case in light of recent adverse developments in the regulatory environment and telecoms market".

The UK investment firm initially offered up to 130 euros per Telekom share, which would have valued the whole company at 850 million euros.

Cinven revised its offer on June 15, adding the condition that it hold back some of the purchase price until Macedonian regulators approve Telekom's sale of its Macedonian unit to Telekom Austria (Xetra: TA1.DE - news) . Slovenia rejected the revised offer.

Macedonia approved the sale in July, after which Cinven and SDH resumed talks. ($1 = 0.9117 euros) (Reporting by Zoran Radosavljevic and Igor Ilic, editing by Louise Heavens)