Advanced Medical Solutions Group (AIM:AMS) shares fell 21% to 195p after TA Associates Management said it does not intend to make an offer.
After considering a possible bid last month, the US private equity firm announced late on Friday that it no longer intends to make an offer.
"TA is grateful for the engagement with the AMS board and management team and would like to thank them for their time and consideration of this potential transaction."
AMS put out a statement saying: "The board of AMS remains confident in AMS' standalone prospects and strategy which it believes will continue to deliver sustainable growth and value creation for shareholders."
Analysts suggested that previous conversations with shareholders during earlier approaches by Montagu and Bridgepoint suggested a price 280p a share was unlikely to secure the business, with some investors viewing a price in the “high 200s” as merely a starting point.
Some shareholders were thought to be hoping for a rival bidder to emerge and push any price closer to 300p a share.