Gregg has been looking at the books at Hillsborough and been in talks since January but the only reason he did not want to take the reigns was because he could only take on around 30% of the shares.
Fans group Wednesdayite, formally the Owls Trust hold a 10% stake in the Hillsborough club and apparently that was the major stumbling block for former Everton man Gregg - who wanted a bigger slice of Owl pie.
Allen has been asking Wednesdayite to sell him the shares to help the club move forward with any prospective takeover although the organisation has been holding firm and keeping a hold of their shares.
Allen, chairman of the board who hold 32% in the club, said: "I would suggest the majority of fans get together and sort the minority out. The board have only got 30% of the club and that is a major problem.
A letter from Gregg's solicitor read: "This decision was made reluctantly after much discussion.
"Our client had completed satisfactorily due financial diligence but one of the crucial reasons why our client decided to withdraw was the recognition that the acquisition of only 30% of the club could be delivered with any definitive certainty.
"However we felt that control was a necessity for our client. In addition the potential blocking ability of the supporters' trust who are 10% shareholders was a clear detraction from making an offer."