Bushveld Minerals (LON:BMN) says it will vote against resolutions put by certain shareholders of takeover target Lemur Resources (ASX:LMR) at a general meeting in October.
JP Morgan Nominees Australia and ACP Investments Pty Ltd together hold 5.43% of Lemur, whose main asset is a coal project in Madagascar, and want to hold a meeting on October 1.
As well as seeking to appoint new directors for Lemur they propose to remove Fortune Mojapelo and Anthony Viljoen, who are both directors at the two companies.
If that goes through, the new directors would also ask Lemur shareholders to approve a return of capital of around A$0.075 per Lemur share.
Iron ore and tin group Bushveld's bid for Lemur values it at around £12.3mln.
Based on acceptances received so far, Bushveld holds around 16.77% of Lemur shares and says it has received confirmations of intent to accept from shareholders representing around a further 27.27%.
Bushveld chief executive Fortune Mojapelo said the firm did not believe these Lemur resolutions have enough shareholder support to be passed.
Bushveld supports the Lemur management's strategy to leverage its significant balance sheet to acquire cash-flow producing or near producing assets in South Africa, he said.
"Bushveld believes that the proposed return of capital is significantly inferior to the option of leveraging its balance sheet to not only see out the current depressed market conditions but to also make highly value accretive acquisitions of producing or near producing assets at a steep discount to their invested capital or replacement cost.
"The Bushveld offer will assist to ensure that there is alignment in the Lemur shareholder base behind the above stated strategy.
"Bushveld is well placed to support this strategy directly as a majority shareholder, given its significant experience identifying and developing assets in this market and its deep network of relationships in the coal industry in South Africa.
"Moreover, its management team having been involved in the development of the Imaloto coal project will also ensure there is continuity in the management of the Imaloto Coal project."
Mojapelo has previously told Proactive: “The acquisition of Lemur allows us to add a funded coal platform to which we can add our considerable technical and project origination and development capabilities to grow a portfolio of value-accretive assets in Africa, with a bias to coal.”
Bushveld shares were unchanged today at 8.25p.