(Reuters) -U.S.-based infrastructure investment firm I Squared Capital has withdrawn plans to make a takeover offer for Hong Kong's HKBN ( HKBNF ), the broadband operator said on Monday, as a competing bid backed by a state-owned entity takes center stage.

The announcement comes over a month after Reuters reported that China Mobile was nearing a deal to take over HKBN ( HKBNF ) with I Squared having dropped out.

I Squared already owns Hong Kong-based broadband provider HGC Global Communications, in which China Investment Corp. holds a minority stake.

However, the Miami-based firm has so far been unable to secure approval from the Chinese sovereign wealth fund to proceed with a formal bid for HKBN ( HKBNF ), according to the Reuters report from May.

Rival suitor China Mobile built a 15.5% stake in HKBN ( HKBNF ) from buyout company TPG and has offered HK$7.8 billion ($993.64 million) for the broadband firm.

I Squared was preparing to trump China Mobile's offer of HK$5.23 per HKBN ( HKBNF ) share, which was made in December, but was not keen to pay more than HK$6 apiece, Reuters reported in January.

HKBN ( HKBNF ) CEO William Yeung said in May it was a "rumour" that China Investment Corp had vetoed I Squared's plan to present a formal offer for HKBN ( HKBNF ).

I Squared Capital did not immediately respond to Reuters' request for comment over why it decided to walk away from making an offer.

($1 = 7.8499 Hong Kong dollars)