Following news that CK Hutchison’s £10.5 billion bid for Telefonica O2 in the UK is likely to be rejected by the EU, the operator is reported to be unwilling to offer any more concessions.

“Hutchison has gone out of its way to offer substantial remedies for the O2 deal. It will fight in court if EU regulators want to block the deal,” Reuters quoted a source as saying.

A block to the deal may even make Hutch exit UK telecoms, where it owns 3 UK, and may impact any future negotiations with European regulators, the report said.

Hutch is also hoping to get approval from the commission for the merger of its Italian unit with VimpelCom, the deadline for which has been pushed from 10 August to 18 August. The EU is extending its investigation into the deal, which would reduce the number of Italian operators from four to three, just like in the UK.

While Hutch has argued that it will boost MVNO competition if the merger between 3 UK and O2 receives regulatory support, the commission has insisted on seeing a new, network-based entrant.

The EU is likely to make a decision in the coming weeks and a formal decision is expected by 19 May.

Hutch is still hoping for a green light but it doesn’t help that the UK’s competition watchdog and telecoms regulator both oppose the deal.

Their opinions may carry “extra weight” as the country debates how much power the EU has, ahead of a vote on EU membership later this year, the report said.

Meanwhile, O2 parent Telefonica is concerned it will have to abandon the deal, which values O2 at about 7.5 times EBITDA, a price private equity firms would not be able to afford, and is working on a back-up plan to cut debt and look into other strategic options.

This could include a sale or a merger with another UK player such as Sky or TalkTalk, but not a fire sale or a dividend cut.