Nexfibre will not be submitting remedies to the Competition and Markets Authority (CMA), the UK’s competition regulator, for its planned £2 billion ($2.67bn) acquisition of Netomnia.

In a joint statement, Nexfibre’s owners InfraVia, Liberty Global, and Telefónica, called the CMA’s findings “fundamentally flawed,” leaving the potential deal up in the air.

Nexfibre is a JV of Virgin Media O2’s parent companies Liberty Global and Telefónica. In February, the company struck an agreement to acquire Substantial Group, which includes Netomnia.

Netomnia is one of the bigger altnets (alternative network providers) in the UK. The company’s fiber network has reached more than three million premises, while the company has more than 460,000 customers.

As with any M&A deal, regulators are probing the viability of the acquisition to ensure it doesn’t reduce competition.

Earlier this month, the CMA outlined its interim report on the transaction, highlighting that it could block the deal, and even suggested that CityFibre could snap up Substantial Group should it block Nexfibre’s efforts.

“In our view, the transaction gives rise to a significant reduction in wholesale competition across the parties’ FTTP network footprints (for simplicity, we focus here on the VMO2/Nexfibre network),” said the CMA in the report. “Our analysis shows that VMO2/Nexfibre’s network is fully overlapped by Openreach, c.14 percent overlapped by Substantial, and c.18 percent overlapped by CityFibre (with minimal overlap between Substantial and CityFibre).”

The CMA said it was open to Nexfibre offering remedies to get the deal cleared. However, this has not gone to plan, as Nexfibre’s main shareholders have turned down this offer.

“The CMA’s interim report is fundamentally flawed. Its conclusions rely on counterfactuals that do not reflect the commercial and financial reality of the UK fiber market. In particular, the assumption that CityFibre will acquire Netomnia is not a credible basis on which to judge this transaction. Nor is the assumption that the billions of pounds of investment enabled by this deal would simply happen anyway,” said the joint statement from InfraVia, Liberty Global, and Telefónica.

The timing of the CMA’s investigation into the Nexfibre-Netomnia deal comes just after BT announced an agreement to acquire TalkTalk, something which Virgin Media O2 has publicly slammed.

Nexfibre’s shareholders made reference to that particular deal, while also taking a jab at CityFibre as well.

“Since the interim report was published, that position has become even harder to sustain. BT’s acquisition of TalkTalk is shrinking the available wholesale market, while CityFibre’s latest accounts and debt restructuring raise further questions about its financial viability. The market has moved on, and the CMA’s analysis must move with it. We engaged in good faith on potential remedies, including commitments on investment and wholesale access. But there is no remedies package that can address the CMA’s current counterfactuals, and on that basis we have not submitted one.”

The company added that it would be willing to continue its dialogue with the CMA “once the counterfactuals reflect the reality of the market.”