A consortium led by private equity firm Terra Firma has decided to withdraw its interest in a takeover offer for health and beauty retailer Alliance Boots.
Boots is one of the UK's best-known High Street names
The move looks set to leave the way clear for private equity firm Kohlberg Kravis Roberts (KKR) and Boots' deputy boss Stefano Pessina to buy Boots.
The group told the BBC that it already owns 29.3% of Alliance Boots stock.
KKR's offer is now worth £11.1bn ($22.2bn), making it the UK's biggest private equity buyout yet.
The Terra Firma consortium - which also includes medical charity the Wellcome Trust and banking group HBOS - said it was "disappointed" not to be able to go ahead with its £10.8bn bid.
"However, we are pleased that the shareholders of Alliance Boots have received a significantly higher price due to our interest, and we wish the company and all its stakeholders well under new ownership," it said in a statement.
News of the decision came after the group held a meeting with the Boots board.
Boots' board of directors has already backed the KKR takeover offer. Mr Pessina himself owns 15% of Boots.
On Monday evening, KKR had raised its bid to 1,139 pence per share.
The private equity firm and Mr Pessina said that they tabled the offer after buying 49.7 million shares at the higher price.
"Overnight, KKR, in partnership with Mr Pessina, spent more than £1bn buying almost 10% of Alliance Boots's shares," said BBC business editor Robert Peston.
"It's history: Boots, one of the UK's oldest retailers, is set to be owned by the American founder of the modern private-equity industry, KKR," he added.
KKR first made an approach in early March, but was turned down because the offer price was too low.
Alliance Boots is best known in the UK for its 2,600 Boots the Chemist shops, and it also has 400 overseas outlets in countries including Thailand and Italy.
As well as the High Street retail arm, the company is a wholesale supplier to more than 125,000 pharmacies, health centres and hospitals.
The company was formed last year through the merger of Boots and Alliance UniChem.
The Alliance UniChem business was built up from a family concern by Mr Pessina, and he is seen as wanting to win control of the group so he can delist its shares and grow the business away from intense stock market scrutiny.