Infrastructure group Downer EDI's possible sale of its mining business to Perenti Global has been suspended due to the market volatility caused by the coronavirus pandemic.
Both businesses said talks had stopped. These have been under way since Perenti flagged the potential buy in its February half-year results presentation.
Last month, Perenti said it was still considering the purchase of Downer's mining business, but dismissed a report that the company had offered to pay $700 million. Perenti said that amount was significantly above what was being considered.
The company today said it continued to believe the potential acquisition had merit but doing so in current market conditions would not be best for shareholders.
Perenti group managing director Mark Norwell said the company has not ruled out the acquisition altogether.
"We will maintain a watching brief on the situation and do not rule out re-engaging with Downer if market conditions improve," he said.
Downer chief executive Grant Fenn said the mining business was performing well.
The company said it was still pursuing the potential sale of its laundries business.
Shares in Downer had dropped 10.4 per cent to $3.74 at 11:45am AEDT.
Perenti shares also fell, dropping 6.9 per cent to 88 cents per share.
By AAP and Business News
