Halfords has pulled out of talks to rescue Evans Cycles, Sky News reports.
The withdrawal paves the way for another investor to take control of the struggling chain, with JD Sports and Sports Direct reportedly showing interest.
According to Sky News, Halfords ended discussions with Evans' advisers in the last few days, having tabled an offer for the business last month.
Sources said that Halfords has decided to focus on Cycle Republic and Tredz, its existing premium brands, rather than pursuing Evans.
It was recently reported that Brompton will launch across the Halfords group in 21 Cycle Republic stores, including via click and collect, and two Tredz stores in November.
Sports Direct International is regarded by industry insiders as the new frontrunner to acquire Evans, although they cautioned on Thursday that it was unclear whether a deal would be agreed.
Any takeover of Evans is likely to value it at between £10 million and £20 million, they added.