The confrontation came as the company, recently demerged from the late Tiny Rowland's mining giant, issued a profit warning which sent the shares into a tail spin.
Lonrho Africa's board yesterday rejected the appointment of four non- executive directors backed by Blakeney Management, an investment fund with extensive interests in Africa.
Blakeney, together with fellow fund African Lakes, where one of the Soros funds owns a stake, have a 10.1 per cent holding in Lonrho. They have been campaigning vociferously to change Lonrho Africa's strategy and are believed to be in favour of a break-up of the group's 28 businesses.
In a letter to shareholders, the chairman Bernard Asher said Blakeney's proposal "lacked both focus and substance". He said that the proposed appointment of four non-executives was an attempt "to take control of the company without paying a premium to shareholders".
A spokesman said the funds had not come up with any specific proposal to improve the company's performance.
In its reply Blakeney said that if the board "continues to ignore the wishes of the company's shareholders, Blakeney will take whatever steps are necessary to ensure [...] that a board is put in place with the ability to perform for them" . It is understood that the funds are planning to call a special shareholders meeting to oust the existing management, led by chief executive Mark Newman.
Lonrho Africa has had a turbulent time since demerging from its parent in May. The shares almost halved in value, as tough trading conditions combined with the boardroom battle to depress sentiment. The company added to its plight yesterday with a warning that profits in the second half would be "substantially less" than the pounds 13.2m made in the first part of the year.
Lonrho Africa said that a plunge in most African currencies, a fall in commodity prices and a collapse in tourism after the bombing of the US embassy in Nigeria, would cut the group's earnings.
The shares closed down 2.5p to 54p.Reuse content