Shareholders in Revolution Bars have voted against a takeover bid from Slug and Lettuce owner Stonegate Pub Company.
Shares in Revolution dropped over 11 per cent to 166p following the decision to reject the 203p per share offer.
Over half of the votes cast opposed the bid, with 53.8 per cent against and 46.3 per cent in favour. The company would have needed the support of 75 per cent of its shareholders to push the takeover through.
More individual shareholders voted to support the takeover than against, but the number of shares held by those in opposition outweighed those who favoured the deal.
Revolution's board said it was "pleased that the management team is now able fully to focus on running the business, starting with the successful delivery of the important Christmas trading period."
Read more: Profits fall at Revolution Bars
Stonegate, which owns several bar chains including Slug and Lettuce and Walkabout, had made a cash offer valuing Revolution at just over £100m.
But a rival merger proposal from nightclub owner Deltic valued the company at a higher price, though it did not offer any cash to Revolution shareholders.
This prompted some analysts to suggest that Revolution was unvervalued, while Artemis, one of the company's major shareholders, said it did not support the Stonegate offer.