“According to the management report on the conclusion of the discussions with the counter-party, the board of directors noted that at present there are not the elements necessary to start negotiations,” the Milan-based company said in a statement Thursday. Talks stalled over disagreements about valuation, according to four people familiar with the matter, Bloomberg News reported July 2.

Telecom Italia’s board authorized in May an “in-depth” review of a possible combination of its mobile-phone business with Hutchison’s Italian unit. The panel had asked top management to verify “the existence of realistic negotiation margins” over the value of the two companies.

“Though the deal made sense from the business side, there were from the beginning too many regulatory, financial and political obstacles,” Andrea De Vita, an analyst at Banca Akros-Esn, said in a phone interview Thursday. The main hurdle remains the valuation, said De Vita, who rates Telecom Italia’s shares “accumulate.”

While Hutchison’s H3G unit has a so-called fair value of 1.5 billion euros ($1.9 billion), the lack of clarity on how much of the carrier’s accumulated losses can be used to offset taxes means the price could differ by billions of dollars, a person familiar with the matter said in May.

Telecom Italia shares rose 1.8 percent to 53 cents in Milan. Hutchison climbed 0.9 percent to HK$82.75 in Hong Kong.