French eftpos vendor Ingenico made a bid of $6.25 per share - around $332 million - for Hypercom in a letter dated Tuesday 5 February, but the deal was contingent on the Arizona-based vendor dropping a proposal to acquire a card payments business from Thales.

But in a statement released today Ingenico says it only discovered last Tuesday that under the terms of the agreement between Hypercom and Thales, Hypercom is not free "to enter into a transaction with us that does not include the Thales assets".

"Under the circumstances created by Hypercom's agreement with Thales, we simply do not see any way to proceed," says the Ingenico statement.

In a separate statement released by Hypercom, Norman Stout, chairman of the US vendor, says: "After discussions with Ingenico throughout the day yesterday and further correspondence today, it became clear there was no path acceptable to the parties to pursue a transaction between Hypercom and Ingenico at this time."

Meanwhile, Hypercom says it has now executed a share purchase agreement with Thales to buy the e-transactions business, in accordance with the binding offer it made in December. Hypercom says it expects the deal to close by 31 March.

Commenting on the Thales deal, Philippe Tartavull, CEO and President, Hypercom, says the acquisition will "significantly strengthen our footprint in Western Europe, provide additional talented people to our global team, increase our economies of scale, deepen and diversify our R&D efforts and accelerate our ability to more quickly build market share".

Today's news scuppers the chances of a deal between Ingenico and Hypercom. The two firms have been locked in a bitter war of words over the past few days, with Stout suggesting that Ingenico's bid was not genuine.

In a letter to Ingenico CEO Philippe Lazare dated 12 February, Stout said: "Your insistence on behaving as if this were a hostile overture and playing this out in the public arena causes us to question your motivations in making this proposal."

Stout also criticised Ingenico's move to sue Francisco Partners, Hypercom's financing partner for the Thales deal, which he called an "attempt to block our acquisition of Thales' e-Transactions business".

In January, Ingenico said it was suing Francisco Partners for allegedly breaking a non-disclosure agreement of Hypercom's proposed acquisition.

In a statement released on 22 January 2008, The French vendor says it filed legal proceedings against Francisco Partners for "using Ingenico confidential information" and breaching the terms of a non-disclosure agreement, dated 21 March 2006 between Ingenico and Francisco Partners.

The breaches arise from Francisco's proposed provision of a $60 million senior credit facility to Hypercom Corporation relating to the acquisition of Thales' e-transactions business, says Ingenico.