HBOS has dropped plans for a £1.6bn takeover of Quintain Estates & Development amid continuing turmoil in global credit markets.

HBOS's Quill Securities subsidiary said that ‘in response to recent press speculation [HBOS] has no current intention to make an offer for Quintain’.

The property deal is the latest to fall through as a result of the credit. Robert Tchenguiz’s R20 vehicle and pub operator Mitchells & Butlers have shelved plans for a £4.5bn joint venture.

HBOS had until 10 September to come up with a firm offer or walk away after the Takeover Panel imposed a ‘put up or shut up’ notice on the bank.

HBOS can come back and make a bid for Quintain in six months under Takeover Panel rules, by which time credit markets may have improved.

Quintain shares fell 87p to 817p yesterday.