Australia’s Link Administration Holdings Ltd. rejected a proposal from Canada’s Dye & Durham Ltd that sought to recut their recently agreed deal on account of potential penalties from the U.K.’s financial watchdog over a collapsed fund the company managed.

Dye & Durham wrote to the Sydney-based Link saying it could not commit to funding redress payments for its Fund Solutions Limited arm, the companies said Monday. The suitor had put forward a new proposal, structured as an upfront cash payment of A$3.81 per Link share, plus a contingent payment - an offer Link said it was “unable to recommend.”

At the root of the derailed deal is an investigation by Britain’s Financial Conduct Authority’s of a now-collapsed fund managed on behalf of investor Neil Woodford, adding new doubts to what has already been a months-long and increasingly strained takeover. 

The revised offer proposed making up the difference within 24 months between the agreed price of A$4.81 per share with either A$1 per share if there’s no liability found, or £306 million minus any penalties, the companies said.

Dye & Durham fell 1.9 per cent to $12.63 at 9:32 a.m. in Toronto. Link closed at A$3.40 in Australian trading. 

Link intends to “evaluate alternatives for the business, including an in specie distribution of a minimum of 80 per cent of Link Group’s shareholding in PEXA, in order to maximise value for shareholders,” it said in a statement.