A plan by South Africa’s Curro Holdings to merge private schools in the country collapsed after parents warned they will withdraw their kids.

Parents say the company segregates students into races.

Curro is 52-percent owned by PSG Group, an investment firm founded by Afrikaner businessman Jannie Mouton, aka the “Boere Buffett” in reference to U.S. multi-billionaire Warren Buffett. Mouton runs 40 private schools in South Africa and has plans to double them in the next five years as the company expands into the rest of Africa.

Curro was in negotiations to acquire rival Advtech, which runs a smaller number of prestigious schools including Crawford College and Trinityhouse, Reuters reported.

The education company has suffered a spate of bad publicity after videos surfaced on social media of pupils in one of its schools in Pretoria apparently being segregated by race. The firm fired the school’s principal after the government threatened to withdraw its license.

South Africa is still trying to unite blacks and whites under a “rainbow nation” mantle 20 years after emerging from an apartheid system that treated blacks differently from whites.

Anthony Clark, an analyst at Vunani Securities, told BDlive that Mouton may have developed cold feet after the threats and decided to grow the company organically rather than through a lethargic acquisition process.

“It’s not like PSG to walk away from a deal, especially one that seemed to have strategic merit,” Clark said. “But I’m guessing Jannie Mouton probably told Curro to forget about Advtech, and rather spend the money earmarked for the takeover to grow its own business.”

Curro wanted to combine its private schools with Advtech’s to take advantage of rising demand for paid-for teaching in South Africa. The country ranked fifth-worst for education in 2014 among 144 countries in a survey by the World Economic Forum.