British IT company Micro Focus International said it has called off takeover talks after bids for the business fell short of expectations and will now resume a share buyback programme.

The firm, which supports mainframe computer applications for companies like Tesco, said in May it was exploring a number of approaches, including from US-based private equity firms Bain Capital and Advent International.

'The board set a deadline for final offers of August 19. Based on feedback received from these parties, the board has terminated discussions and, as a result, Micro Focus is no longer in an offer period,' it said in a statement.

Earlier this month the firm posted better-than-expected first-quarter trading.

Last week shares in Micro Focus rose after Hewlett-Packard's $11.7 billion bid for Autonomy ignited investor interest in the European software industry.

Shares in Micro Focus closed on Friday at 263 pence, valuing the business at about £520 million ($862 million). The firm said its share buyback programme would resume with immediate effect.

It has shareholder authority to buy back up to 12.3 million shares and has $112 million of distributable reserves.

'The board is reviewing its options to enable the group to increase the amount of distributable reserves and will consult with shareholders on the optimal use of the group balance sheet,' it added.