Vijay Mallya's Grandprix team may not have encountered as many speed breakers as the Diageo-United Spirits deal seems to be. The long-drawn negotiation has turned into a mind game of who will blink first. CNBC-TV18's Varinder Bansal and Gautam Srinivasan report.

Unlike the Grandprix track, this road for Vijay Mallya seems to be a bumpy one. United Spirits attempts to sell over 15% stake to Diageo is encountering speed-breakers as the two sides have not been able to agree on transaction details.

John Pollaers, President - Asia-Pacific, Diageo, said, "We have been in discussion, but we haven't yet been able to find a structure that is acceptable to both partners. We shouldn't assume that this will lead to a transaction overall."

After this, the stock fell 7% as the market took it as the talks being inconclusive.

Talks have been on since November 2008 and Mallya had promised shareholders in January this year that he would de-leverage United Spirits balance sheet in the next six months.

Vijay Mallya told CNBC-TV18 that talks with Diageo are very much on track. There are structuring issues due to anti-trust, monopoly reasons which the lawyers are addressing. London's Fair Trade Foundation has been objecting to Diageo's indirect holding in White & Mackay as it feared a monopoly post the deal. Analysts believe that Mallya could look at divesting part of Whyte & Mackay to avert the anti-trust issues. Others believe this to be a ploy by Diageo to finalise the deal at a lower price.

Also read: Open to Diageo board representation in USL: Mallya