Australia's mergers panel on Sunday rejected a private equity consortium's last-ditch attempt to revive a chaotic 11.1 billion dollar (9.2 billion US) bid for national carrier Qantas.
The Airline Partners Australia (APA) bid initially collapsed late on Friday after it failed to garner more than 50 percent of shareholder acceptances by a 7:00 pm (0900 GMT) deadline.
But a revival of the bid looked possible after a major American investor decided to partially back the deal, pushing acceptances to 50.6 percent, just hours after the deadline had passed.
Those hopes were dashed on Sunday after the Takeovers Panel refused an appeal to count the late acceptances, effectively scuttling the consortium's chances of getting the bid off the ground.
"The panel has decided not to commence proceedings in relation to APA's application," it said in a statement.
The bidding consortium, which is led by Macquarie Bank and includes Australian and foreign partners, immediately said it would challenge the ruling by asking for a second decision from the panel.
"Airline Partners Australia (APA) is seeking an urgent review of today's decision by the Takeovers Panel which has declined to hear APA's application to allow the offer for Qantas to proceed," it said.
"APA notes that a majority of Qantas shareholders (around 60 percent by number) representing more than 50 percent of Qantas shares have indicated their support for the offer."
The director of the Takeovers Panel, Nigel Morris, said the body was currently appointing another group of members to consider the second appeal.
Asked whether the decision on Qantas was final, Morris said: "Yes and no."
"The sitting panel which received the application has said that it would not proceed with the application," he told AFP.
"(But) APA has said it will be seeking a review."
Analysts had criticised the consortium for attempting to push ahead with the bid despite missing out on the minimum 50 percent of shareholder acceptances at the time the deadline closed.
"Try that on election night. Turn up at a polling booth at 9:00 pm and ask to be allowed to vote," business commentator Terry McCrann told Channel Nine ahead of the decision.
Commentators said that some hedge funds may have misjudged the situation by presuming the deal, believed to be the largest ever private equity bid for an airline, would reach the 50 percent mark without their acceptances.
If APA had gained 50 percent of shareholder acceptances, it would have triggered a two-week extension of the 5.45 dollar share offer to allow the group to reach the minimum 70 percent it needed to succeed.
Debate has also centred on whether the consortium's offer, which had been rejected by at least one key stakeholder as significantly below an acceptable price, was too low given recent gains in airline stocks.
"The Australian airline industry has improved significantly," said Brent Mitchell, head of research at Shaw Stockbroking.
"And also the Australian market has gone up a significant amount so, in the relative valuation terms, Qantas is now valued at significantly above the previous takeover price."
APA, which comprises Australian companies Macquarie Bank Ltd, Allco Finance Group Ltd and Allco Equity Partners, US buyout firm Texas Pacific Group and Canada's Onex Corp, may also have erred in locking in the final price too soon.
"They could have shaken all these recalcitrant funds loose with another 10 or 20 cents and they probably would own 100 percent," said Tom Elliott of takeover arbitrage hedge fund MM&E Capital.
The Qantas share price, which closed Friday at 5.38 US dollars, is now expected to fall while the airline's board, which unanimously supported the takeover, is also likely to face a shake-up.