A proposed investment in Gloucester by France-based businessman Mohed Altrad has collapsed after Premiership Rugby rejected his plan to purchase a 45% stake in the top-flight club.
The board voted to restrict any investment from Altrad - who also owns French side Montpellier - to just 20%.
Gloucester say Altrad has therefore opted to withdraw from the deal.
He said: "Whilst this news is extremely disappointing for Gloucester and myself, rugby is the biggest loser."
Syria-born Altrad, 69, would have needed approval from various other bodies, including European Professional Club Rugby (EPCR) and the Rugby Football Union (RFU), for any takeover to go through.
"Having initially proposed a 55% investment, we were pushed hard to come down to an interest below 50%," Altrad added.
"I respected the guidance given and proposed a 45% stake in Gloucester, with even further commitments. I have still not received any substantive reasons why our safeguards were insufficient, beyond a sense of general discomfort with dual interests.
"Our vision was to support an English club, facilitate investment in junior and senior players as well as coaching staff and improve its training and playing facilities. The wider benefits were obvious."
Andrew Umbers of Oakwell Capital who advised the Altrad Group, added: "It is disappointing having received broad support from all of the relevant rugby authorities, RFU, FFR, World Rugby and the EPCR but not the unanimous support of the PRL.
"The Altrad Group would have brought significant investment into the city of Gloucester and its well-managed and fanatically-supported rugby club."
Chairman Martin St Quinton, who has been the sole owner of Gloucester since February 2016, added: "We would like to thank Mr Altrad for his interest in the club. It speaks volumes of how well we are viewed externally that he was so interested in investing in us.
"Whilst we naturally would have welcomed Mr Altrad's investment in to the English game, we are on a solid footing moving forward and look forward to finishing this season strongly and have a lot to look forward to."
The Cherry and Whites are eighth in the Premiership table with two matches remaining and through to the semi-finals of the European Challenge Cup.
BBC rugby union reporter Chris Jones
It's clear a number of Premiership clubs were uncomfortable with Altrad owning a significant part of Gloucester, while also having such influence in France with Montpellier.
And while you can understand the concerns over Conflict of Interest - Montpellier and Gloucester may be in the same European competition next season - Altrad could point to the models in Ireland and Scotland, where their professional teams are owned and controlled by the same paymasters, namely the Ireland and Scottish rugby unions.