The board of Intrinsic Value, the small cap investment fund set up by the entrepreneur Luke Johnson, urged its shareholders yesterday to reject proposals being tabled at a meeting later this month so that it can liquidate the business and return cash to shareholders itself.
Laxey Partners, the shareholder activist which owns 19.25 per cent of the fund, is trying to seize control so that it can wind it up and return the cash to shareholders.
Laxey has ordered an extraordinary general meeting, to be held on 17 February, to have Intrinsic Value's chairman, Jimmy West, and a non-executive director, Harry Hyman, ousted and replaced with three of its own directors.
But Intrinsic Value hit back yesterday, urging shareholders to reject those resolutions - which would in effect give Laxey control of the board - and said it would move towards an "orderly liquidation" of the fund to return cash to shareholders.
Mr West said: "We believe that the EGM is a clear attempt by one group of shareholders to take control of the company for their own ends. The board is determined to safeguard the interests of all shareholders."
It is thought that Laxey Partners has the backing of a number of other major shareholders.
Sources estimate the cash to be returned to shareholders at a maximum of £20 to £25m.