By Stephen Jewkes and Giuseppe Fonte
MILAN, March 25 (Reuters) - The sale of Italy's biggest independent gas storage facility has stalled after a bid by Australia's Macquarie MQG.AX of more than one billion euros ($1.2 billion) failed to win over owner Morgan Stanley (NYSE:MS) MS.N , three sources said.
In November, Macquarie entered exclusive talks to buy Ital Gas Storage from Morgan Stanley Infrastructure Partners which owns 92.5% of the asset. to a source at the time, the bid valued the asset at around 1.2 billion euros including debt of around 850 million euros.
"The shareholders didn't agree with the price," one of the sources said, adding the deal was in a state of limbo.
A second source said Morgan Stanley would now take time to consider its options and whether to launch another sales process.
Morgan Stanley and Macquarie declined to comment.
The site, which will have a capacity of around 1 billion cubic metres (bcm) when fully operational, is part of a sector the Italian government considers strategic.
"There is nothing wrong with the asset, it was simply a price issue," a third source said.
Italy, which is looking to gas as a transitional energy source, has the largest gas storage capacity in Europe at around 18-19 bcm, most of it run by gas transport group Snam SRG.MI .
Macquarie, which already owns part of Italy's second-biggest gas transporter Società Gasdotti Italia, is targeting a series of infrastructure investments in Italy. ($1 = 0.8475 euros)