Shares in Monstermob fell after the mobile phone entertainment company said talks with a number of potential bidders had ended.
In August, Monstermob said it was in early-stage discussions with a suitor. Other companies have enquired about acquiring the group.
But Monstermob said on Wednesday that it was unlikely that a “proposal will be forthcoming that can be recommended to shareholders”.
It said that it was in negotiations to restructure its outstanding obligations for earn-out payments made to vendors of businesses that the company bought in China, the Philippines and Russia as part of its international expansion plans.
A further announcement would be made shortly, it added.
The Lancaster-based group renegotiated payments in June to the vendors of two of its newly acquired Chinese businesses.
The success of one unit, M-Dream, had forced it to stump up an additional $35m (£19m) to $45m.
Investors have worried that the talks could result in a dilution of their holdings.
Monstermob said the move was to “to clarify its capital structure and increase its finance flexibility”, raising speculation that the group was looking to issue new equity.
Monstermob shareholders include the Barclay brothers, owners of the Telegraph newspaper, whose TecCapital investment group holds a 4.6 per cent stake.
Shares in Monstermob fell 3¼p to 47¾p yesterday.
The group has had a turbulent 2006, having seen Niccolo de Masi replace Stuart Higginson as chief executive.