The decision to terminate the agreement, which was signed in May, comes as early proxy returns suggested that majority of shareholders would vote against the $1.7bn offer.
The companies had agreed to pay around C$6.5 ($4.79) a share, excluding Alfa’s 18.95% shares in the Canadian firm.
However, O’Hara Administration-led group of shareholders, which own around 20% shares in Pacific, claimed that the offer undervalues the company and demanded for higher price.
Two proxy advisory firms, Institutional Shareholder Services and Glass Lewis, have also advised shareholders of Pacific to vote against the deal, reported The Wall Street Journal.
Harbour Energy CEO Linda Cook said: "As previously stated our offer of C$6.5 per share was full, fair and final, and therefore we have no plans to revise the proposal.
"As a result, we have agreed with the company to terminate the arrangement agreement."
Pacific Rubiales said it will have no further material obligations to Alfa and Harbour Energy with the termination of the dealincluding termination fee or expense reimbursement.
The company said it will continue to reduce operating costs, divest non-core assets and reduce debt.
Pacific Rubiales, along with its preferred joint venture partner Alfa, seeks to explore energy projects in Mexico.
Harbour Energy, a joint venture of Noble and EIG Global Energy Partners, operates upstream and midstream energy assets globally.
Image: Pacific Rubiales and its preferred joint venture partner Alfa intend to seek energy opportunities in Mexico. Photo: courtesy of ALFA, S.A.B. de C.V.
