Beatties said a deal with Fraser was the only one left on the table after talks with the other suitor, widely believed to be Debenhams, ended.

The unnamed company "no longer wishes to pursue the opportunity further".

Midlands-based Beatties said last month its board had agreed a 168p per share, �69.4m takeover by House of Fraser.

However, it said earlier this month that it had received another, unsolicited, approach that might result in an offer for the group.

No new stores

Beatties said in a statement on Friday: "Shareholders are reminded that, following the termination of the discussions with the third party, there is no offer for the company other than the proposal announced by Beatties and House of Fraser."

Despite problems at its store in Birmingham, Beatties - which has 12 outlets - is seen as having an attractive portfolio as only two of its shops are loss-making.

House of Fraser, which operates from 51 sites, said the proposed acquisition provided it with about 653,000 square feet of profitable retail space.

The company said it expected to integrate Beatties during the 2006/07 financial year - a period in which there are no new stores planned.

Beatties has sites at Birmingham, Wolverhampton, Solihull, Sutton Coldfield, Aylesbury, Birkenhead, Burton, Huddersfield, Northampton, Dudley, Telford and Worcester.

It is expected to continue to operate under its existing brand name, but benefit from the addition of House of Fraser ranges.