VimpelCom’s bid to merge with the telecoms assets of Naguib Sawiris, the Egyptian entrepreneur, has hit another hurdle after a supervisory board told the Russian mobile phone group to renegotiate the terms of its $6.6bn deal.

Six of VimpelCom’s nine-person supervisory board agreed in principle to a deal under which the Russian operator would buy the assets of Weather Investments, Mr Sawiris’ private investment vehicle. The six directors included three representatives of Altimo, an investment arm of Alfa Group, VimpelCom’s largest investor.

However, three directors representing Telenor, the Norwegian operator that is VimpelCom’s second-largest shareholder, rejected the deal. As a result, VimpelCom’s supervisory board did not pass a shareholder-related agreement that is a condition of the transaction and advised VimpelCom to go back and negotiate further with Weather over terms and conditions.

The deal to create the world’s fifth-largest mobile phone group by customers is a big test for Alfa and Telenor, which only resolved a bitter dispute relating to Ukrainian telecoms assets last year. Telenor, which holds 36 per cent of VimpelCom’s voting shares, said it disagreed with the deal based on price and because it believes it does not make “strategic sense”.

A deal with Weather would represent a change of strategy for VimpelCom, which has until now focused on expanding in emerging markets. However, Weather’s assets include Wind, Italy’s third-largest mobile operator.

Weather has a controlling stake in Orascom Telecom, the Cairo-listed telecoms company. Telenor and Orascom have overlapping assets in Bangladesh and Pakistan, which could create regulatory issues.

Andrew Hogley, a telecoms analyst at Execution Noble, said that the issue for Telenor was likely to be less about price and more about the shareholder structure following the merger. But he added that while Telenor had the ability to block the deal, the Norwegian group was unlikely to want to enter into another protracted dispute with Alfa.

With Christmas looming, followed by Russia’s holiday season, analysts speculated that talks could continue well into the New Year.

Mr Sawiris said that once he had received “a revised and final offer” the Weather board would assess the options that were in “best interests of our stakeholders”. He later told Al Arabiya television that the value of the deal would not change. VimpelCom confirmed it would negotiate a revised transaction with Weather, adding: “This is not a final halt to the deal.”

Under the terms of the deal Weather would receive $1.8bn in cash and obtain a stake worth $4.8bn in VimpelCom. Weather would hold 19 per cent of the voting shares in the enlarged VimpelCom group.

VimpelCom is headquartered in Amsterdam but has operations in Russia, Ukraine, Kazakhstan, Uzbekistan, Tajikistan, Georgia, Armenia, Kyrgyzstan, Vietnam and Cambodia.

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