Shares in the troubled carpet retailer crashed almost 15% in early trading. The group's market value has collapsed since it floated on stock market.

Allied's share price has collapsed

Allied's shares have had a terrible run since the group admitted to embarrassing accounting errors and a slump in sales during 1998. The slowdown in consumer confidence this year has hit the household furnishing sector hard.

Woolworths to B&Q retailer Kingfisher, venture capital groups and a financial consortium lead by Belgo and Pizza Express restaurant entrepreneur Luke Johnson were rumoured to have been interested in buying the carpet group.

Uncertain times

However in a brief statement, Allied said it had concluded it was in the best interests of shareholders to end the talks.

The group said that a period of uncertainty had existed since it first announced it had been approached last September, which was becoming damaging to the business.

The UK competition watchdog, the Office of Fair Trading, vetoed a bid for Allied from rival Carpetright in November. The company is however selling its 27 Carpetland superstores to Carpetright.