The share prices of Chinese commercial property developer Soho China plunged by more than 40% Monday after its takeover deal with U.S. private equity group Blackstone fell apart. Blackstone backed out of the $3 billion takeover deal late last week.

The plunge as the opening of trading erased nearly $830 million of Soho China's market valuation. Soho China is one of the country's largest and best-known commercial real estate developers.

The drop came after the two companies released a joint statement announcing that they would not able to secure regulatory approval for the deal within the agreed timeframe. Soho China cited "a lack of progress" as the reason for the deal's collapse in its regulatory filing.

Blackstone initially offered to acquire the Hong Kong-listed property developer for HK$5 per share, valuing it at over HK$26 billion ($3.3 billion). By late Monday morning trading, Soho China's shares were trading at around HK$2.28 per share - about the same level as before the deal was announced in June.

Blackstone planned to acquire Soho China as part of its international expansion plan, particularly its intention of strengthening its position in China's lucrative commercial property development market. Acquiring the company would give Blackstone access to Soho China's large portfolio of prime commercial property in major cities such as Beijing and Shanghai.

The failed deal comes amid intensifying regulatory scrutiny in China. Regulators have been clamping down on major deals, including those involving large foreign investments, some of which have been perceived to be in violation of anti-trust regulations.

Since China started its campaign to crack down on what it described as monopolistic business practices, foreign companies have become been wary of making major investments in the country.

The failed deal has also returned the spotlight to Soho China's founders, husband and wife Pan Shiyi and Zhang Xin. The power couple has been harshly criticized on social media over the past weeks over accusations of running away with their wealth to the U.S. The couple recently made a large donation to Harvard University. They also made major real estate purchases in the U.S., most of which had made headlines.