Inmet said the offer failed to attract the required 50.1 per cent of Petaquilla shares on a fully diluted basis by 11:59 p.m. PT on Monday.
"Accordingly, Inmet's offer expired at such time in accordance with its terms. Inmet did not acquire any Petaquilla shares pursuant to the offer," the company said.
Petaquilla shares fell 23 per cent or 15 cents to trade for 49 cents on the Toronto Stock Exchange, while Inmet shares closed up 80 cents at $56.76. Petaquilla stock had traded for 35 cents before the takeover offer was announced on Sept. 5.
Inmet's offer was seen as a move to consolidate the area around its Cobre Panama project.
Petaquilla's Molejon project neighbours the US$6.2-billion Cobre Panama copper-gold porphyry project, Panama's largest-ever mine development.
The companies had held talks on the weekend about a possible friendly deal, but were unsuccessful.
Petaquilla said Tuesday that it "remains committed" to talking with Inmet and other interested groups.
"In addition, as part of this strategic review process, Petaquilla will continue to implement its business plan, including the spin-out of its infrastructure business to shareholders, the development of its Lomero-Poyatos gold mine in Spain and its previously announced high-yield note offering," the company said.
Petaquilla chief executive Joao Manuel Manuel said Monday that the weekend talks focused on the possibility of spinning off some of Petaquilla's assets into a new company, with Inmet acquiring the others.
However, he said the structure was complicated and the company did not have the time to examine just how it would be done and the tax consequences for investors.
Based on Inmet's recent share price, its offer for Petaquilla was valued at about $147 million.
Inmet had offered Petaquilla shareholders 0.0118 of an Inmet share plus 0.1 of a cent in cash for each of their shares. Alternatively, shareholders could have chosen to receive up to 60 cents in a combination of cash and shares based on a Inmet share price of $50.82.Suggest a correction