A proposed back-door listing of Mega, the privacy service founded by Kim Dotcom, has failed.
Listed shell TRS, which was to acquire Mega in order to list it on the New Zealand Stock Exchange, informed the market on Wednesday that it would be unable to secure shareholder approval for the deal before a May 29 cut-off date.
"It has become evident that this condition will not be satisfied within this time frame," TRS said in a notice to the NZX.
"TRS has been advised overnight by Mega that the shareholders of Mega will not agree to an extension of the conditional date. As a consequence, it will be the case that on 29 May, the conditions to the acquisition will not be satisfied, the share sale deed entered into between TRS and the Mega shareholders will terminate, and the proposed acquisition of Mega will not proceed."
Mega's chief executive, Graham Gaylard, said Mega is still growing strongly, with more than 18 million registered users. He said he would remain as chief executive after the listing failure.
"I can't share the plans anymore, we are of course still a private company," he told ZDNet by email.
Dotcom no longer has a direct interest in Mega. His estranged wife Mona, however, holds 15 percent of the company through a trustee company.
Dotcom is still battling against extradition to the US to face copyright infringement and racketeering charges.
In March, PayPal ceased processing payments for Mega.
TRS' merger with Mega was first announced over a year ago, after an earlier plan to reverse-list Cornerstone Mineral Corporation similarly faltered.
Auckland-based Mega, which launched in January 2013, delivers cloud-based communications services with what it calls browser-based User Controlled Encryption (UCE) that the company says provides automatic encryption for data transferred to and stored on Mega's cloud service.
UCE means that only the user controls the encryption key.
TRS said as part of the termination process, it may be required to issue new shares to Mega to cover transaction costs.
"The board of TRS are very disappointed with this development, and will be looking at other investment opportunities for TRS as a matter of urgency," the notice said.