Two of the US private equity groups thought to have been working on a bid to acquire a majority stake in Nokia Siemens Networks (NSN) have reportedly walked away from a deal. According to sources at the Financial Times (FT), KKR and TPG have backed away from bidding after “months” of studying NSN’s books. Their withdrawal leaves another private equity duo, the Gores Group and Platinum Equity, as the sole remaining bidding consortium for the joint venture between Finland’s Nokia and Germany’s Siemens. Nokia, KKR and TPG all declined to comment on the status of the sales talks, which are believed to have started last summer. However, Siemens told the FT that NSN remained “in constructive talks with several interested parties.” And Nokia spokesman Doug Dawson told Dow Jones Newswires: “As we have said earlier, there has been unsolicited interest in NSN and we continue to be in constructive talks with multiple parties.” NSN has “real momentum and innovation, and shareholder interests are aligned in building a strong and profitable company,” Dawson added.

According to the report, the waning interest in the firm is thought to be linked to the deepening crisis at Nokia, which analysts say has meant the Finnish firm had “not concentrated on the operational problems of NSN.” Nokia’s reluctance to act has led to growing frustration within Siemens. “NSN is bigger than some Dax companies but it is being managed as if it was a simple division within Nokia,” said one Siemens manager. Nokia owns a golden share in the joint venture and is represented on the board by four of the seven members. NSN is the world’s second-largest telecoms kit vendor (after Ericsson) but it has been loss making for much of its existence, losing EUR142 million in Q1 this year. If the sale to private equity does not come off, it is thought that the two owners will work towards an IPO of the company when their joint venture agreement comes to an end in 2013.