Hi Jihad,
I think you are on the right track. To add to your reasoning, the importance of this particular target, together with the reason for which the deal failed, and alternative targets will likely influnce to a large extent what one does next.
If no dealbreaker (e.g. fraud, or lack of a sustainable competitive advantage uncovered, etc.) were identified, and it was only not a good moment for the seller to sell at the price offered, maybe next year the chances are better for the seller to accept.
If, however, it is a definite no, on either side, then maybe looking at alternative targets is appropriate.