Businessman Tim Waterstone has dropped plans to buy the book shops that bear his name from HMV Group after saying the British retailer set unreasonable conditions on talks.
Mr Waterstone, who had proposed paying up to £280 million (€407 million) for the book store chain he founded in 1982, said today he was still interested in a deal if the conditions were eased.
The conditions included having to complete an examination of the book store's finances within 14 working days and agreeing not to make a fresh bid approach for 12 months if talks failed, he said in a statement.
"No potential acquirer could reasonably have accepted these conditions," Mr Waterstone said.
"However, we believe the financial logic for the group (HMV) to sell the book business is demonstrably clear, and if these assets should be put on the market without penal preconditions to due diligence then we would remain highly interested."
A spokeswoman for HMV, which also sells music and DVDs, said there had been no talks with Mr Waterstone or his advisers about a confidentiality agreement, which usually sets out conditions under which a suitor can examine financial data.
HMV also said in a statement it had been notified that Lazard Private Equity Partners had withdrawn its backing for Mr Waterstone's bid proposal.
Analysts said the collapse of talks would allow HMV to press ahead with its planned acquisition of bookstore Ottakar's, although that deal may face a counterbid from WH Smith.