Manitoba Telecom Services Inc said the Canadian government has rejected the proposed sale of its Allstream division to Accelero Capital Holdings due to "unspecified national security concerns."

The government rejected MTS and Accelero's offer to take necessary actions to address the government's concerns, the company said in a statement on Monday.

Manitoba said on May 24 it would sell its Allstream fiber optic network to telecom tycoon Naguib Sawiris-controlled Accelero for C$520 million (US$500 million).

Reuters