* Will review any new govt conditions
* To proceed with talks when environment improves
SEOUL, June 5 (Reuters) - South Korean fixed-line carrier KT Corp is waiting for the South African government to propose new conditions after it turned down its reduced offer to acquire 20 percent of Telkom, a senior executive said on Tuesday.
South Korea’s No.2 mobile operator slashed an initial offer by nearly a third to 25.60 rand per ordinary share last month as Telkom’s share price had fallen since the initial offer.
South Africa’s government, which holds a majority stake in Telkom together with the state pension fund, rejected the reduced offer.
“We don’t know what conditions Telkom want,” Yung Kim, senior executive vice president at KT, told Reuters. “We will review new conditions if they are offered.”
Telkom shares had fallen by about 25 percent from the initial announcement of KT’s offer in October 2011 to the revised offer seven months later.
A KT spokesman said the company was open to further negotiations with Pretoria.
“We need to clarify the cause first. We are considering proceeding with the talks again when the environment improves,” he told Reuters.
The deal would have included an issue of new shares for KT, which would have diluted the government’s shareholding.
KT is looking for opportunities away from its traditional market in emerging markets in Africa, Latin America and Eastern Europe as competition back home squeezes margins.
Telkom is Africa’s biggest landline operator. It has launched a mobile phone service unit to diversify income but has struggled against more established rivals MTN and Vodacom.
Pretoria’s surprise rejection of the reduced KT offer has intensified speculation that it is not prepared to cede control of a company that many in the ruling African National Congress view as an arm of government.
The leading Business Day newspaper said in an editorial the move had a great deal to do with the government’s “obsession with centralisation and control”.
The ANC last year tried unsuccessfully to roll back approval for Wal-Mart’s $2.4 billion acquisition of retailer Massmart. (Reporting by Hyunjoo Jin; Writing by Helen Nyambura-Mwaura; Editing by Jon Loades-Carter)