The 31-year-old entrepreneur, who controls the tiny investment vehicle Lanica Trust, had hoped to woo the old-fashioned movement with the prospect of a pounds 500m deal.
But the Co-operative Wholesale Society snubbed his overtures following its regular monthly board meeting yesterday. "For purposes of clarification, the CWS board confirmed that CWS has not entered into any discussions with Mr Regan or Lanica in respect of any of its business interests and has no intention of doing so."
The Co-op's refusal to meet Mr Regan compounds the embarrassment of the affair. Lanica Trust's shares have been suspended since last month when news of its intentions were leaked to a Sunday newspaper.
There was further controversy yesterday when rumours swirled that HSBC James Capel was set to resign as Lanica's brokers. This was later denied.
The Stock Exchange declined to comment on Lanica's share suspension. The company's brokers admitted the shares had been suspended for longer than anticipated and said: "We would hope that the shares would be relisted in the near future."
Lanica's shares have proved a volatile investment and soared 31p to pounds 19.50 in mid-February before they were suspended. The shares stood at 116p last September when Mr Regan bought a controlling stake in what was then called New Guernsey Investment Trust.
The Stock Exchange has refused to elaborate in its conversations with the company, only saying it has not launched a full-scale investigation.
Analysts say that even if Lanica's tilt at the Co-op colossus proves unsuccessful, a shake-up of its operations is becoming increasingly likely. Its sprawling interests include farming, supermarkets, department stores, estate agencies, travel agencies and funeral parlours.