UK-based music group EMI has turned down a £2.5bn ($4.6bn) takeover offer from US rival Warner Music Group, the firm which it is itself trying to buy.
The 320 pence a share approach from Warner is the second the UK group has received in less than two weeks.
Both Warner's offers have been "wholly unacceptable", EMI said in a statement.
The UK firm has already made two approaches to Warner, following talks with Warner's management and with some of its shareholders.
A combination between the two firms would slim the roster of global music majors down to three, making a new group similar in size to Sony-BMG and Universal Music.
Tug of war
The tit-for-tat bidding began in early May, when EMI offered $28.50 a share - or about $4.2bn - for Warner.
BID TIMELINE
The US firm, home to performers including Madonna and REM, rejected the deal but talks continued.
On 14 June, Warner countered with its own 315 pence a share offer for the UK group, whose artists include Robbie Williams, Gorillaz and Corinne Bailey Rae.
In rebuffing Warner's renewed approach, EMI said it remained keen to pursue its own offer, which it has raised to $31 a share.
"An acquisition of Warner Music by EMI... would deliver value to EMI's shareholders which is far superior to Warner Music's revised alternative proposal," it said.
But while many observers felt a tie-up would produce lower costs and a more focused approach to the online music market, some feared that the long-drawn-out courtship might prove too problematic.
"This is becoming one of the longest takeover pursuits in history and the market is not convinced that it is going to happen this time either," said Richard Hunter, analyst at Hargreaves Lansdown Stockbrokers.
EMI's most recent financial performance, published in late May, showed the firm's profits up 13% in the year to March on the back of surging download sales.
As the London market closed, EMI shares were up 8.37% or 23.75 pence at 307.5 pence.
By 1615 GMT, Warner shares listed in New York were up 5.1% or $1.39 at $28.62.
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