TMN issued a statement before the stock market opened, saying that, despite its performance meeting management's expectations, August Equity could not generate sufficient third-party funding to go through with the deal.
By midday today the company's share price had dropped 20% from yesterday's close to 30.1p.
Details of the original cash offer of , when TMN's independent non-executive directors made a statement to the stock exchange without the consent of August Equity.
Chief executive Mark Smith and chief financial officer Craig Dixon were working with August Equity on the deal.
The non-executive directors formed a committee to evaluate offers for the company and gave Smith and Dixon the green light to pursue their interest.
The company now says Smith, Dixon and the non-executive directors "look forward to the continued running of the company as a listed PLC with confidence".
Today Peter Harkness, TMN's chairman, said: "Whilst we understand that difficult debt market conditions has resulted in August Equity being unable to deliver an acceptable offer to the board, the board is united in its confidence in TMN's future as a listed company."
According to Smith, the company is trading in line with expectations.
In March, TMN rejected a £40m cash and shares offer from Tangent Communications, the marketing services group backed by former Carlton TV chairman Michael Green. There were also reports of interest from other parties, including Trinity Mirror, before in April.