Macmahon Holdings has rejected the latest takeover offer from Indian-owned firm Sembawang Australia.
Macmahon has already struck a deal with Leighton Holdings over the sale of its troubled construction business, and had rebuffed previous offers by Sembawang.
But the wholly-owned subsidiary of engineering and construction group Punj Lloyd last week lodged a new offer, valuing MacMahon's construction business at $35 million.
After meeting with Sembawang in recent days, MacMahon said on Tuesday the new offer could not be practically implemented, and was not superior to its deal with Leighton.
While Sembawang's offer price was higher than Leighton's, it was not enough to make up for the added risks associated with the proposal, MacMahon said.
"The proposed transaction with Leighton remains the best and only transaction practically capable of being completed," it said in a statement.
MacMahon shares were down 1.5 cents, or 4.2 per cent, at 34.5 cents at 1038 AEDT.
They rose last week when the new offer from Sembawang was lodged.
An extraordinary general meeting at which shareholders will vote on the Leighton proposal is scheduled for February 26.