Direct Line Insurance Group PLC (LSE:DLG) shares plunged 12% on Monday after suitor Ageas said after the close on Friday that it will not make a takeover offer.
The Belgian insurance giant's two attempts to engage with FTSE 250 company's board of directors were both rejected, it said.
Hans De Cuyper, CEO of Ageas, said: "We had hoped to reach agreement on a jointly recommended firm offer together with the Direct Line board.
"However, I am convinced that given the circumstances we took the right decision not to make an offer, staying true to who we are and what we stand for in terms of maintaining a friendly approach and respecting our financial discipline."
An initial possible officer was made on 19 January as a mix of cash and shares, with an implied value of 231p per Direct Line share.
After this was rejected a renewed was made, containing a larger proportion of cash, which implied a value of 237p per share, valuing Direct Line at £3.17 billion.
Ageas said it "was not able to identify additional elements based on publicly available information that would justify significant adjustments to the terms of its possible offer" and so decided not to make a firm offer.
"Ageas continues to believe in the underlying attractiveness and future opportunities of the UK personal lines sector and the role of Ageas UK in this market, underpinned by its successful turnaround over the last few years. Ageas UK will continue to execute its focused personal lines insurance strategy alongside its valued distribution partners."