The UK's Takeover Panel today ruled rebel shareholders of gold miner Petropavlovsk are not attempting to take control of the company.
The watchdog, which regulates deals, said three of four directors proposed by shareholders Renova, M&G and Sothic Capital, including Chelsea chairman Bruce Buck, were independent. However, the fourth, Vladislav Egorov, was not independent because he is employed by Renova, the panel said.
"As a result, the executive has concluded that the resolutions proposed by Renova, M&G and Sothic are not 'board control-seeking'... and, accordingly, that these shareholders, and the proposed new directors, should not therefore be considered to be acting in concert and that there is therefore no requirement for a mandatory offer to be made under the code," the watchdog said.
The investors, who between them hold an almost 40 per cent stake, are urging shareholders to vote against the re-election of Peter Hambro, chairman and co-founder of Petropavlovsk, and three non-executive directors at the company's annual general meeting (AGM) on 22 June, citing unspecified corporate governance issues.
In a statement today, Hambro said: "Petropavlovsk accepts the narrow remit of the Takeover Panel in such circumstances, which in our case is limited to using its best efforts to determine whether or not the proposed new directors are "independent" of those proposing them.
"The Petropavlovsk board continues to maintain that replacing more than half the members would be disruptive to the successful completion of the very promising projects we have underway."
M&G said: "Our goal has always been to improve the value of the investments we hold on behalf of our customers through better corporate governance. We have never sought to take control of Petropavlovsk."
Earlier this week, three major proxy advisory firms - ISS, Glass Lewis and PIRC - published recommendations for shareholders to vote in favour of the current board.
However, in another blow to Hambro and the current board, ISS made an abrupt U-turn last night to side with the rebel shareholders. ISS said it received additional information which made a "compelling case" that a change at board level is warranted, despite the lack of a detailed strategy, according to Reuters.
The advisory group recommended backing two nominees: Garrett Soden and Ian Ashby. It recommended rejecting Buck and Egorov.
Renova did not immediately respond to a request for comment.