By the end of the offer period on January 29, only 43.05 percent of Techem shareholders had accepted the joint offer, which valued Techem shares at 55 euros (71 dollars) each or 1.36 billion euros in all, Macquarie said in a statement.

That was well below the minimum acceptance level of 70.5 percent.

"Therefore the condition of reaching the minimum acceptance level has not been met. The tendered Techem shares will be re-booked without undue delay, presumably within two banking days," the statement said.

Techem said it regretted the development.

"We will now look to the future and continue with our growth strategy. The positive development of our business encourages us in this," chairman Horst Enzelmueller said in a statement.

"Techem will continue to engage in constructive dialogue with its shareholders."

Investors, too, appeared to be disappointed.

In early trading on the Frankfurt stock exchange, Techem shares were showing a loss of 0.45 euros or 0.82 percent at 54.55 euros, making it one of the biggest losers on the mid-cap MDAX stock index.

Already late Thursday, it had appeared that Macquarie's and BC Partners' joint bid had indeed been unsuccessful.

A partner at BC Partners, Stefan Zuschke, had told the business weekly WirtschaftsWoche in its online edition: "It looks as if our takeover offer has failed. We greatly regret this."

Zuschke pointed the finger at hedge funds, who had been betting on an even higher bid, he said.

The US fund Elliott, which holds 10 percent of Techem, had been demanding much more than 55 euros per share, Zuschke said.

But he was insisted that the offer would not be raised.

"You have to stop somewhere, otherwise you open yourself up to blackmail," Zuschke said.

The takeover battle for Techem has been dragging on for months.

In October 2006, Macquarie had offered to buy Techem for 44 euros per share, or 1.1 billion euros, in all but that bid was dismissed as "unsolicited" by Techem's management.

BC Partners entered the running -- this time with Techem's support -- at the end of November with a higher bid of 52 euros per share or 1.28 billion euros in all.

But in December, Macquarie bettered that bid by offering 55 euros per share, or 1.36 billion euros in all.

Then in January, the two rival bidders buried their differences and agreed to submit a joint offer.

Techem, a leading provider of energy and water billing data services, employs a workforce of 2,400 and operates electricity and water metres in some 7.3 million households in Germany.

It booked net profit of 39.9 million euros on sales of 466.8 million euros in the year that ended September 2005.

Zuschke told WirtschaftsWoche that BC Partners and Macquarie had "got to like" each other during the takeover battle. And the magazine said the two companies were now considering a joint bid for Techem rival Ista.

Investment firm CVC has said it planned to sell Essen-based Ista later this year, preferably via a stock market flotation.

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