After a tense night of vote-counting, the hotels-to-agriculture group announced that its shareholders had defeated the rebels' proposal to oust three board directors.
At a heated meeting in London, Lonrho Africa's shareholders, which include 33,000 small investors, voted by a slim margin to keep chairman Bernard Asher and non-executive directors Stephen Wallis and Michael Wilson on the board.
The knife-edge vote was a blow to the attempt by Blakeney Management and African Lakes, an investment fund with interests in Africa, to change the company's strategy. It also put an end to a two-month feud which rocked Lonrho Africa, a recent spin-off from the late Tiny Rowland's mining giant.
The rebel investors - Lonrho Africa's largest shareholders with 10.1 per cent - wanted to replace the three directors with Miles Morland, the chairman of Blakeney, John Jackson, the chairman of leisure group Ladbroke, and businessman Dekel Golan.
In a bitter campaign marked by mud-slinging on both sides, Blakeney and African Lakes, in which a Soros fund has a stake, accused the board of destroying shareholder value. They said the strategy of keeping together companies ranging from cotton plantations to Toyota car dealers damaged the company's prospects. The rebels were understood to want to break up and sell off a large part of the company's businesses.
Blakeney and African Lakes were also angry at the share price's underperformance since demerger. The shares have lost around a quarter of their value since the company was spun off from Lonrho in May. They closed down 4p at 61p yesterday.
The board of Lonrho Africa, led by chief executive Mark Newman, rejected the allegations and accused Blakeney of trying to gain control of the company without paying a premium. In an angry outburst, Mr Asher accused the Blakeney nominees of having little experience of African business and lacking a consistent strategy.
Mr Morland said Blakeney would not abandon its fight to improve the company's performance. "We believe that the ideas we have put forward are right. In the politest possible way, Blakeney will continue to knock on Mr Asher's door."
He hinted that if the company's performance did not improve over the next three months, the board could be faced with another revolt at the shareholder meeting in March next year. Lonrho Africa declined to comment.Reuse content