British property company Hammerson has withdrawn its recommendation to shareholders that they back a takeover of smaller rival Intu Properties.
Hammerson cited softness in the UK retail property market and shareholder pressure for the change of heart.
Intu said the explanations given by Hammerson were "unsatisfactory".
The move comes less than a week after French shopping centre operator Klepierre abandoned a £5 billion bid for Hammerson, accusing it of failing to provide "meaningful engagement" over a potential deal.
Hammerson said it had concluded that "heightened risks associated with the Intu acquisition outweigh the long-term rewards that can be expected in comparison to other strategic options open to the company".
The company blamed weakness among retailers and other tenants in the UK, which has led to some retailers going bankrupt, as well as subdued consumer confidence.
Hammerson also cited the "wide range of views on the merits of the Intu acquisition" held by shareholders. Dutch pension fund APG Asset Management had said it would vote against the deal.
Hammerson said it was confident in its prospects as a standalone business and was reviewing options to boost shareholder value.
The withdrawal of the recommendation alone will not cause a lapse of Hammerson's offer or terminate a co-operation agreement between the two companies, Hammerson said.
Hammerson said it would have to convene a shareholder meeting to consider the Intu deal, unless Intu and the UK's Takeover Panel agree otherwise.
Hammerson's offer will lapse if its shareholders do not approve the acquisition at the meeting.
Hammerson is the co-owner of the Dundrum Town Centre, the Ilac Centre in Dublin city centre and the Pavilions in Swords in Co Dublin.
