After a lengthy flirtation, outsourcing firms PeopleSupport Inc. [PSPT] and IPVG appear to have ended acquisition talks for good.

In a statement on Thursday, PeopleSupport said Thursday that it will reject a sweetened bid from IPVG and Asian private equity firm AO Capital Partners, asserting that the bidders couldn't show that they fund the  $17 per share, or $385 million, all-cash deal. As expected, 

"We were prepared to give serious consideration to the IPGV and AO Capital proposal," PeopleSupport CEO Lance Rosenzweig said in a statement, explaining that the company wanted to evaluate the bidders' funding for the transaction. "Despite numerous requests,and our providing them with a nondisclosure agreement to protect any such information as they deemed confidential, they did not provide us with any evidence that they could obtain sufficient financing for this transaction."

This latest development follows PeopleSupport's rejection in December of a $15 per share, or $350 million, deal from IPVG and AO Capital, an offer that was widely regarded as too low. PeopleSupport, however, stopped short of closing the door on any takeover, saying in its statement that it is still focused on maximizing shareholder value. - Andrea Orr

See Jan. 31 statement from PeopleSupport
See Jan. 29 post from Tech Confidential
See Dec. 13 post from Tech Confidential