Private equity firm Terra Firma founder Guy Hands dropped his legal battle with investment bank Citigroup over his firm's takeover of EMI in 2007 last week.
He had sought damages of £1.5bn alleging that the US investment bank misled him over the deal. Citigroup denied the allegations.
Terra Firma has also agreed to pay all the US investment bank's costs.
Citigroup said in a statement: "We are pleased that Terra Firma has unreservedly withdrawn the allegations, agreed to the dismissal of the proceeding and will pay Citi's costs in relation to this matter."
Hands said that while his claims were "brought in good faith" it had "become evident that our documentation of the fast-moving and complex events, and memories of these events after nine years, are no longer sufficient to meet the high demands of proof required for a fraud claim in court".
He added: "The matter is now closed. Terra Firma is looking to the future. We have an exciting portfolio of companies, a talented and experienced team, supportive and loyal investors and one billion euros of capital to invest."
Wyevale was front runner to take over Tesco-owned Dobbies before the Brexit vote on 22 June in a deal worth more than £175m. However, Edinburgh Woollen Mill boss Philip Day is also believed to be interested.