Fletcher Building has scrapped the proposed takeover of Steel & Tube Holdings after its enhanced offer was rejected.
The rejection sent the target's shares plummeting to their steepest fall in two months from a four-month high.
The $315.4 million offer, at $1.90 per ordinary share in cash plus a special dividend up to five NZ cents per ordinary share upon deal completion, was about 11.8 per cent higher than the previous bid.
New Zealand’s largest construction company launched its bid earlier this month, but Steel & Tube said the initial offer had undervalued the company.
A "lack of support from Steel & Tube's board to progress the proposal in a timely manner" was blamed by Fletcher for their withdrawal.
Steel &Tube said its advisers' view was of an intrinsic share value between $1.95 and $2.36.
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