Copper miner Grupo Mexico said on Thursday it plans to drop its offer to buy outstanding shares in Mexican airport operator GAP after a lengthy legal dispute.
Grupo Mexico, which accumulated almost 29 percent of the airport operator, broke GAP's bylaws that cap minority stakes at 10 percent, GAP argued in court.
The Grupo Mexico announcement "confirms the ruling made previously by a judge, ordering a definitive suspension of the offer," said Miguel Aliaga, GAP's head of investor relations.
Shares in Grupo Aeroportuario del Pacifico sank on the news, which Grupo Mexico announced in a statement sent to Mexico's stock exchange, with no further details.
Grupo Mexico will have to sell at least some of its stake in GAP to comply with the 10 percent cap.
That is putting pressure on the airport operator's shares. "In the short term it's negative (for GAP)," said Pablo Duarte, analyst at Actinver in Mexico City.
But longer term, more shares will be available in the open market, which increases the liquidity of GAP shares, Duarte added.
Grupo Mexico was unclear about whether it wanted to buy all of GAP or just increase its stake, which stood at almost 29 percent at the end of last year.
The company, which said it wanted to expand its transportation business, announced in June it would seek more than 30 percent of the airport operator. That triggered a stock market law making it obligatory for the copper miner to bid for the entire company.
But the deal became mired in a legal fight as Grupo Mexico, which operates copper mines in Mexico, Peru and the United States, as well as cargo train lines across Mexico, sued GAP to change its bylaws and GAP shot back with an appeal to stop the takeover, although the miner continued to buy shares.
GAP shares dropped 3.11 percent to 48.64 pesos in local trading.
GAP operates 12 airports, including those in the Pacific resorts of Puerto Vallarta and Los Cabos.