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Architect Aukett Fitzroy Robinson has abandoned plans to merge with quoted rival SMC. It failed to agree on terms first proposed in August.

SMC is now facing a takeover of its business from a third party backed by private equity. It confirmed discussions had begun by a formal offer has not yet been made.

Market commentators had not expected the tie-up with Aukett to proceed. SMC's share price has fallen 94% since January, with the original merger proposition failing to stop this freefall.

SMC has become loss making in the year and made plans to slash costs. Deputy chairman Stewart McColl resigned in May and institutional investors have been reducing their stakes.

Aukett's stock increased over 4% on Friday morning's announcement.