New Zealand’s building material giant Fletcher Building has reportedly withdrawn its proposed takeover of Steel & Tube Holdings after its offer was refused. As per credible sources, Fletcher Building had initiated a bid earlier in October, but Steel and Tube stated that it significantly undervalued the company and will take time to overcome regulatory hurdles.

Fletcher Building’s enhanced offer stood at $315.4 million at $1.90 per ordinary share in an all-cash deal and a special dividend of up to $0.05 per ordinary share after closing the deal. This offer was about 11.8 percent higher as compared to the previous bid.

According to sources familiar with the matter, the proposal was withdrawn because Fletcher blamed the lack of support from Steel & Tube’s board to take the proposal forward in a timely manner.

Authentic reports state that Steel & Tube had claimed to take three to four weeks for an independent valuation on the second offer. It had also said that both bids in its view were too low. The Wellington-based company was quoted saying that the permitted dividend is not enough to compensate shareholders, considering the extended duration that’s practically required to get regulatory approvals.

Susan Paterson, Chairwoman of Steel & Tube, said in a statement that Fletcher’s withdrawn non-binding offer doesn’t prevent other interested parties from approaching with higher values. In August, the steel distribution firm had reported a 60 percent reduction in annual profits after it wrote down the value of its assets, flagging impairment charges and exiting its plastic business in May.

As per Grant Davies, Financial Advisor at Hamilton Hindin Greene, New Zealand’s steel industry has had its issues and Steel & Tube has been affected. Therefore, it would be surprising if any major offers even came by. Now, it’s the responsibility of Steel &Tube’s board to justify why the offer wasn’t appreciable, added Davies.

Steel & Tube’s shares were up by 15 percent then plunged by 6.7 percent after Fletcher withdrew the offer.