iSelect says major shareholder Innovation Holdings Australia (IHA) has dropped plans to launch a takeover of the company amid impacts from the COVID-19 pandemic.

The comparator says it has been in discussions with IHA, which has a 28.7% holding, about an off-market offer at a proposed price of 40 cents per share.

IHA advised iSelect on Saturday that it was not proceeding as the parties couldn’t agree on various terms in a draft agreement, “including the terms of a material adverse change condition, and any impact of COVID-19 on that condition”.

iSelect says the pandemic has presented a number of challenges, but the business made an underlying fourth-quarter profit.

The firm says it has adjusted its operating model, particularly in life insurance and home loans and reduced its fixed cost base. So far in the current financial year, the early signs are positive.

July earnings before interest, tax, depreciation and amortisation were $1.5 million, compared with $600,000 in the year earlier month, iSelect said.

The company has also sold its investment in Intelligent Money to one of the founders of that business for “a nominal value”.