Briscoe, controlled by managing director Rod Duke, opted not to increase its offer, which amounted to $NZ1.80 a share in cash and scrip.
Before the offer was made, Kathmandu shares had traded at $NZ1.39 on the NZX.
They fell about two per cent to $NZ1.50 on Friday morning.
The Kathmandu board rejected Briscoe’s offer saying it undervalued the chain, adding it had been valued at between $NZ2.10 and $NZ2.41 a share by Grant Samuel’s independent assessment of the offer.
Briscoe’s stake reverts to 19.9 per cent, the most it can hold without making a full takeover.
Briscoe stock last traded at $NZ2.99.
Kathmandu last traded on the ASX at $A1.31, down 8.00 cents or 5.76 per cent.