Shares in Italian cafés and delis chain Carluccio's slumped more than 14% tonight after takeover talks with a possible bidder fell apart.

The bid approach was announced only three weeks ago and was said to have come from Hutton Collins - the private-equity firm that backed restaurant chains Pizza Express, Wagamama and Loch Fyne.

It was thought restaurateur Richard Caring, Carluccio's largest minority shareholder, could have been tempted to launch a rival bid.

The shares jumped 24% from 78½p the day before the bid to 97½p on Friday night but sank 14p to 83½p today to value Carluccio's at £48 million.

Carluccio's said: "Discussions in relation to this preliminary approach have now been terminated and the company is therefore no longer in an offer period."

The company reported half-yearly results this month in which it revealed an "unwelcome but anticipated" drop in profits to £2.5 million from £2.8 million in the same period last year.

It blamed the weak economy pushing down consumer spending.