O’Reilly’s bid of euro 328 million is believed to be E7 million less than that offered by Gannett, the publisher of US Today.
Newspapers in Ireland and the UK reported that Glasgow Herald workers had hoped that O’Reilly’s bid would succeed, believing that their jobs would be more secure under the Irish tycoon.
Scottish Barclay Brothers, owner of the rival paper The Scotsman have already pulled out of the bidding battle.
O’Reilly’s failure to acquire the Herald will be seen as a bitter blow. His Independent and Independent on Sunday newspapers lost euro 25 million last year. Readership has fallen by 11 percent.