LONDON (Reuters) - Kingfisher (L:KGF), Europe's largest home improvement retailer, said on Monday its proposed 275 million euro (201 million pounds) purchase of smaller French rival Mr Bricolage had collapsed.
Doubts had been raised regarding the deal last week after the majority of the Mr Bricolage board and its largest shareholder, franchisee group the Association Nationale des Promoteurs de Faites Le Vous-Mene (ANPF), expressed reservations.
Last July Kingfisher struck a deal with the ANPF, which holds 41.9 percent of Mr Bricolage, and the founding Tabur family, which holds 26.2 percent, to buy their holdings for 15 euros per share. The agreement was binding, subject only to regulatory clearance.
The agreement carried a provision that it would lapse if anti-trust clearance was not obtained by March 31 although an extension could be agreed by all parties.
On Friday the ANPF refused any extension.
"Consequently the transaction will not proceed. Kingfisher is considering all of its options," it said. Those options could include legal action.
Mr Bricolage declined to comment.
Shares in Kingfisher have fallen 15 percent over the last year but were up 2.6 percent at 367 pence at 0754 GMT.
Mr Bricolage shares were suspended from trading in Paris last Monday.
Kingfisher had wanted Mr Bricolage to beef-up its position in France, its most profitable market, where it already trades as Castorama and Brico Depot.
The collapse of the deal comes four months after Veronique Laury succeeded Ian Cheshire as Kingfisher's chief executive.
Laury will present Kingfisher's 2014-15 results on Tuesday with the firm expected to post a 9 percent fall in pretax profit.