LONDON David Bowie, Blondie and Gnarls Barkley publisher Chrysalis Group Plc CHS.L said on Tuesday it had ended talks with would-be buyers after rejecting a 104 million pound ($205.4 million), 155 pence-per-share cash offer.
Shares in the firm slumped more than 20 percent after the news and were down 21.5 percent at 106 pence at 0710 GMT.
Chrysalis sold its radio assets last year to focus on its music publishing and recording business and said in December that it was in preliminary discussions with "select parties".
"The Board is terminating the process and Chrysalis can confirm that it has ended discussions with potential buyers," it said in a statement on Tuesday.
"The position of potential buyers and current valuation levels have been negatively impacted by global economic and credit market conditions."
In February analysts had speculated the firm could be worth up to 230p a share.
Music groups EMI and Warner Chappell, the music publishing unit of Warner Music WMG.N, were tipped as bidders while Sony/ATV, a joint venture between Sony (6758.T) and the singer Michael Jackson and private equity firms working with specialist music publishers, was also believed to be in the frame.
Chrysalis said trading remained tough and warned that its sparse list of recent album releases and a strike by Hollywood scriptwriters had hit royalty revenues by 10 percent.
"The relatively quiet release schedule going into the 2008 financial year has led to a weaker first half NPS (net publisher's share)," adding that 2008 NPS would be lower than the 11.9 million pounds earned in 2007.
Chrysalis, which also has The Gossip, The Cribs and Estelle on its roster, is one of the few remaining independent British publishers.
Music publishers have become attractive takeover targets in recent years as they offer reliable revenues and are somewhat protected from the effects of illegal online downloading that have savaged the rest of the music industry.
(Reporting by Marc Jones; Editing by Quentin Bryar)