(Adds details on IMC statement, context)
By Gram Slattery
SAO PAULO, Sept 18 (Reuters) - The board of Brazilian restaurant operator International Meal Company Alimentacao SA's (IMC) rescinded its approval of a tie-up with unlisted corporate caterer Sapore SA after disagreements in the auditing phase of the deal, IMC said on Monday, drawing a strong rebuke from its counterparty.
In a securities filing, IMC, which owns fast food brand Frango Assado and fast-casual chain Viena, also said it had approved a buyback of 13 million shares and a capital reduction of 100 million reais ($24.2 million).
In June, IMC's board had preliminarily approved a tender offer by Sapore to buy out 25 percent of IMC's outstanding shares at 9.30 reais per share, well above the current price of 6.67 reais. IMC's free float would then have been reduced until Sapore ended up with a 41.79 percent stake.
But IMC said that deal is now off the table.
"Considering that there was no consensus with representatives of Sapore regarding certain matters identified in the audit, the board of IMC ... decided to rescind the agreement."
In an email sent to IMC and forwarded to Reuters, Sapore questioned IMC's basis for withdrawing from the agreement and said the issues raised in the securities filing were not fully brought up in face-to-face meetings.
Sapore also said it "reserved the right to examine all appropriate measures" to defend the company's interests.
In a separate statement sent to Reuters, Sapore added it found discrepancies with IMC's accounts and made suggestions to IMC which were not accepted. The firm added that it was still interested in eventually "finding a solution."
Fast food and fast-casual restaurants are considered a major growth industry in Brazil, due in part to an explosion in young single professionals and students with disposable income.
$1 = 4.14 reais Reporting by Gram Slattery Editing by Kevin Liffey and Paul Simao