Trafalgar dropped its bid for Southern Union.

The investment concern headed by financier Charles W. Knapp said it “has decided not to pursue” its previously announced offer to buy Southern Union, an energy company headquartered in Dallas, for $242 million in cash. In a statement, Los Angeles-based Trafalgar Holding said it made the decision after conducting a “broad-ranged, due diligence investigation” and concluding that “its criteria for acquisition of (Southern Union) could not be met.”