A Kohlberg Kravis Roberts-led consortium has admitted defeat in its efforts to wrest the semiconductor company Freescale from a rival private equity consortium led by the Blackstone group.

Freescale, which was spun off by Motorola two years ago, announced on Friday it had accepted a $17.6bn takeover bid from a group including Blackstone, The Carlyle Group, Permira Funds and Texas Pacific Group.

But it stressed there was a provision in the agreement that would allow Freescale 50 days to entertain rival bids.

This was seen as giving the KKR consortium, which had arrived late on the scene, enough time to complete due diligence and consider topping the rival group’s bid.

But in a statement issued on Monday night, the KKR group said it had “ended discussions with Freescale Semiconductor about a possible acquisition of the company.”

A spokesman for Austin, Texas-based Freescale said the company had no comment.

Freescale shares rose 5.7 per cent on Monday to $39.26 on Friday’s news. They were down 2.4 per cent at $38.30 in midday trading in New York on Tuesday.

While another bidder could emerge by the November 4 deadline, Freescale is understood not to be involved in any other discussions over a sale.

Instead, it will be preparing for a meeting of shareholders to approve the Blackstone-led deal, which would be the largest ever leveraged buyout in the technology sector.

The KKR consortium gave no reason why it ended discussions, but Blackstone is understood to have increased its bid by around 5 per cent to $40 per share after it was challenged by its rival.

KKR, Silver Lake and AlpInvest partners last month bought 80 per cent of Philips’ semiconductor division for €3.4bn ($4.4bn), which could have been combined with Freescale. However, the KKR group could have faced anti-trust issues and opposition from Philips and unions in Holland.

Additional reporting by Peter Smith in London