New Tel pulled the plug on the deal at the last minute "due to certain conditions precedent being unsatisfied or waived".
"In accordance with New Tel's rights under the Share Purchase Agreement, the Company has now requested a refund of that deposit," NewTel said in a statement to the ASX.
The deal had been due to be completed 31 October, with the company to raise $11.5 million for the buyout through a share issue. NewTel had originally boasted that the DigiPlus acquisition would add $100 million to its revenue, along with 150,000 customers.
"New Tel is continuing discussions with the DigiPlus sellers and other parties regarding their respective businesses and the Company will announce further details to the market when new arrangements have been confirmed," the statement said.
NewTel stopped trading in its shares last Monday, prompting speculation about the future of the DigiPlus acquisition. New Tel had intended to retain the DigiPlus as its consumer brand, focussing the New Tel brand on the small to medium enterprise segment.
New Tel had originally announced plans to acquire DigiPlus in March, signing formal agreements in June.
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