The group, which has been the subject of numerous bid approaches over the past few years, now plans to remain independent. However the announcement opens the door for Mark Bunce, a founder and former chief executive of the company, to relaunch a bid for the group.
Tom Adam, chairman of Country Casuals, indicated that the offer for the group was simply pitched too low.
"Our principal shareholders felt that our company was worth more," he said.
Country Casuals is not in talks with Mr Bunce at the moment but Mr Adam did not rule out future takeover discussions.
Talks with Mr Bunce, who owns nearly 11 per cent of the company, collapsed in June when he failed to come up with a definite offer for the business and other groups indicated their interest in the company. Mr Bunce and his wife Christina, a fellow founder of Country Casuals, left the group by mutual agreement at the end of June, having earlier resigned from the board after rejecting Country Casuals' plans to sell Elvi and Lerose, two loss-making subsidiaries, to management buyout teams. Mr Adam confirmed that Mr and Mrs Bunce had received compensation on leaving the group but declined to reveal how much they were paid.
Analysts speculate that Mr Bunce would have to offer more than 140p a share for the group. That is the price that former chairman John Shannon was willing to pay for the company when he launched an unsuccessful pounds 27m hostile bid two years ago. But some observers believe Mr Bunce may have difficulty in raising the sort of capital required to secure a takeover.
Mr Bunce was unavailable for comment yesterday.
Country Casuals will be left to concentrate on its core retail brand, which has had a chequered history in the past few years. Operating profits from this division fell from more than pounds 3.5m in 1995 to pounds 3.1m in the year to last January. "We didn't provide clothes that our customers wanted. We got it wrong. But we are confident about this year. Our new ranges have been well received," said Mr Adam yesterday. The company announced that like-for- like sales for the first six months to 26 July were running ahead 8 per cent on last year.
Country Casuals has been a poor performer since it was floated at 130p a share in 1992. Its share price slumped 20p to 113.5p on yesterday's news, valuing the group at less than pounds 22m.