Fusedale gave notice to the Australian Securities Exchange this morning.

The company said some conditions of the offer had not been fulfilled.

“Fusedale will allow its takeover offer to lapse on the scheduled closing date of 7.00 pm (Sydney time) on Friday, 15 January 2010,” the company said.

“Rey shareholders who have accepted Fusedale’s offer will retain their shares after the offer lapses on 15 January 2010 and will be free to deal with their ordinary shares in Rey as they see fit.”

Fusedale noted its voting power in Rey was only 0.23%.

The merchant bank kicked off its offer in September and formally launched it in November.

Gujarat made the first move for Rey, launching its takeover offer back in June, with the cash option of the bid at 9c per Rey share.

Gujarat’s offer will close on January 21.

Rey directors have campaigned against both offers for the company.

Rey aims to start its Western Australian open cut Canning Basin thermal coal project in 2012, with coal to be trucked 180 kilometres from the project site in a 2 million tonne per annum export operation.

In June, Rey upgraded the project’s resources to 511Mt, including 35.2Mt measured, 143.5Mt indicated and 331.5Mt inferred.

Crosby’s move shaved 5% off Rey shares this morning to trade at 20c.