Shares in Sainsbury's fell 12.5p to finish on 526p yesterday after the consortium which had been circling the supermarket group walked away from its bid.

Yesterday afternoon, CVC Capital Partners, The Blackstone Group International and TPG Capital revealed they were no longer considering making an offer for the chain.

"After a number of discussions between the board of Sainsbury's and the consortium, it became clear that the consortium would be unable to make a proposal that would result in a successful offer,” it said in a statement.

Sainsbury's said the pre-conditions laid down by the consortium in its proposals had been “outside of the control of the board and related to the consortium's proposed financing structure.”

“The board explored with the consortium whether the key pre-conditions attached to the proposals were capable of being satisfied or could be revised, but the consortium concluded that this was not possible. As a result, the consortium decided to cease discussions,” the retailer added.

Analysts said that the failure of the consortium was of no major surprise and that the retailer would now face pressure to maintain its share price. However, Richard Ratner, from Seymour Pierce, said the shares were likely to fall back to around 420p.