Myerson is officially cold shouldered in the City

The controversial investor Brian Myerson is to be "cold shouldered" from any takeover dealings in the UK for three years after he failed to overturn a ruling that he had breached the Takeover Code.

An appeals board yesterday confirmed that Mr Myerson, the South African-born shareholder activist who hit the headlines after a public divorce, would face only the second "cold shoulder" order in the 40-year history of the Takeover Panel's code of conduct, along with associate Brian Padgett and Swiss investor Daniel Posen.

The ruling bans the City professionals from taking part in any merger or acquisition activity for three years. The Takeover Appeals Board upheld the censure first handed out by the Hearings Committee of the Takeover Panel, agreeing that the three had acted "in concert" last year to buy 6.7 million shares in Principle Capital Investment Trust (PCIT), which was founded by Mr Myerson's Principle Capital. The board said the trio were looking to get round Takeover Panel rules and avoid making a full offer for PCIT.

The three then attempted to hide their dealings from the panel "to present a false picture of what happened," as well as "to conceal the breaches of the code involved", the Appeals Board said in its ruling yesterday. It added that the committee was satisfied their behaviour "was co-ordinated, disingenuous and dishonest".

Mr Myerson reacted angrily yesterday, saying the matters raised by the panel were "wholly wrong and misguided". He added: "I did not break the Takeover Code in any way and I totally refute any suggestions that I did." He is examining his options including a potential challenge in the European courts.

The three men appealed the decision made in April by the Hearings Committee. Mr Myerson and Mr Padgett said the committee's findings failed to properly weigh the evidence, adding the body was insufficiently independent and impartial. They called for the case to be reheard and for the charges to be dropped.

Mr Myerson said he had wanted to build his stake in PCIT to 29.9 per cent, the largest holding before the Takeover Panel demands a full bid is made to all shareholders. He was looking to block hedge fund investors who wanted the trust to be liquidated with the cash returned to investors. After Mr Posen bought shares, the concert party allegations emerged, which both denied. Shortly after, Principle Capital took PCIT private with a 38p a share bid.

Mr Myerson said yesterday that he "hardly knew" Mr Posen and that there was no evidence of his trawling associates for support.

The statement on his behalf concluded he had "enjoyed a lengthy and unblemished career in the City. He has more than 20 years' experience working in an activist role, in sometimes controversial circumstances, but has never before been the subject of any criticism by any regulator".

Yet in rejecting his appeal, the Appeals Board said that following hearings "as the evidence piled up the case against Mr Posen, Mr Myerson and Mr Padgett became irresistible". It said they were persons who "are not likely to comply with the code".

In 2008, Mr Myerson's wife found out he had been living a double life with a mistress for years, and had fathered a child with her. Last year he lost a court attempt to cut the £11m divorce settlement she was awarded, saying the credit crunch had wiped him out.