Angry shareholders yesterday demanded answers from MWB Business Exchange's independent board, saying it had "defied logic" by rejecting a £60m bid on valuation grounds in favour of an offer of barely half that sum.
The independent board of Business Exchange last month recommended an offer of £32.7m from MWB Group, which already owns 72 per cent of the office space group.
Regus then lodged a significantly higher counter bid, but so far neither MWB nor the independent board have engaged with it. The FTSE 250 company yesterday set a deadline of Monday for discussions to start or it will walk away.
Pyrrho Investment, the second largest shareholder in MWB with an 8 per cent stake, yesterday called the whole bid process into question. A spokesman for the investors said they wanted a "clearer understanding of why Regus' bid was rejected".
The investor raised questions over transparency as well as over corporate governance, pointing out that MWB's chief executive Richard Balfour-Lynn is also the chairman of Business Exchange.
Pyrrho sent an open letter to the company's independent directors outlining its concerns and said it was "deeply troubled" to read last week's announcement in which they rejected Regus' 92.3p per share bid.
The investor said the decision "calls into question whether you, as directors, are taking the necessary steps to discharge your duty to the company to maximise the value of its business".
Regus's bid "would not reflect the underlying fundamental value of Business Exchange in the long term", Pyrrho agreed. But added: "It is wholly unclear to us why, apparently in direct contradiction to this statement, you appear minded to recommend a previous offer from MWB that values the business at 49.8p per share and is to be satisfied largely in shares rather than cash."
Pyrrho has demanded that the independent board remove its recommendation for the MWB bid and call in new investment banking advisers to carry out a strategic review of the company and determine its actual value.