French company Danone and domestic firm Apurna, owned by Serbian basketball star Vlade Divac, thought they had bought Knjaz Milos last week only to hear that Serbia's Securities Commission had annulled the deal because extra money was offered to smaller shareholders if they sold to Divac's company.
The move has caused friction between and within Serbian authorities. Only the day before, deputy prime minister Miroljub Labus had gone on state television to announce that Danone and Apurna's takeover bid was entirely legal.
Yet it was the government itself which asked for an investigation and since then Commission members have reportedly been probed by the country's organised crime police. One Commission member, Dusan Bajec, had already resigned, complaining he had not been given enough information on the Knjaz Milos sale.
Now, after further crisis talks with government ministers, the Commission has decided to suspend its decision and invite new bids, including those from Danone and Apurna, for shares in Knjaz Milos before 12 noon on 6 December. Shares sold for €227 each in last week's aborted deal.
The sale of Knjaz Milos, part-owned by the government and part by domestic firm FPP Balkan, has been presented as win-win situation for everyone involved.
Dinkic said the government expected to make €34 million from the deal and the new owners would benefit from Knjaz Milos' position as the Serbian market leader in bottled water with its Knjaz Milos and Aqua Viva brands.
Danone, as the world market leader in bottled water, emerged as the favourite to secure the deal out of a number of international companies, including soft drinks giant Coca-Cola, before last week's rumpus.
Economic minister Predrag Bubalo also displayed support for a deal involving Apurna as opposed to rival domestic bidder and existing shareholder FPP Balkan. He reportedly told other ministers that Apurna's offer was the best as it included investment and a social programme, while FPP only wanted to acquire a limited parcel of shares.
But whatever the outcome, the sale of Knjaz Milos has been a public relations nightmare for the Serbian government and the resulting scandal may make investors nervous about getting involved in similar takeovers in the future.
Two days before the affair erupted, finance minister Mladjan Dinkic said the law on securities needed to be amended "as certain failures in the legislation have been recognised in the Knjaz Milos takeover process".
Several legal battles have since been launched in Serbian courts and in the last few days reports have emerged claiming that the pro-western Serbian Democratic Party, belonging to president Boris Tadic, plans to gather enough opposition to bring down the government, citing Knjaz Milos as the culmination of many dubious government actions.
Deputy prime minister Labus, leader of the G17 Plus party, has already threatened to take his party out of the government coalition because of the Knjaz Milos affair.