LONDON — Shaftesbury, the property firm which owns large chunks of central London, has taken its feud with its top investor Samuel Tak Lee public, amid speculation the Hong Kong billionaire is eyeing a takeover bid.

Shaftesbury owns a £3 billion property portfolio in Chinatown, Soho, and Carnaby Street. It said in a statement on Thursday that it received a letter from Lee, who has built up a 25.02% stake in the company, of his intention to vote against renewing Resolutions 16, 17, and 18 at its 2018 AGM.

The Times newspaper reported last year that company directors believe Lee has been quietly amassing a 25% stake as a prelude to a full takeover bid, and blocking the resolutions could strengthen his ability to do so.

If renewed, Resolution 16 would give company directors — who say Lee has refused ever to meet with them — the ability to issue new shares in exchange for cash, a common means of raising equity.

Resolutions 17 and 18 would allow company directors to issue share capital without being obliged to first offer those shares to existing shareholders — something known as “non-preemptive share issuing.” It means Lee would not be automatically entitled to a 25% stake of any new shares, as he would under a pre-emptive arrangement.

Issuing shares non-preemptively can prevent shareholders increasing their stake in a company every time it raises capital.

‘Great concern’

Lee said in the letter that the company’s decision to issue shares in December 2017 without offering shareholders the first option to buy had “caused me great concern,” and said the arrangement was “prejudicial” to existing shareholders.

Shaftesbury chairman Jonathan Nicholls said in the statement that it “continues to consider that all of the resolutions to be proposed … are in the best interests of the Company and its shareholders as a whole and they unanimously recommend that shareholders vote in favour of them.”

He said the board “does not agree with the statements made and sentiments expressed by Mr Lee in the attached letter to shareholders, but respects his right and stated intention to vote against certain resolutions being proposed.”

Lee, 78, owns vast swathes of commercial property in London’s West End through the company Langham Estate.

Resolution 16 requires only 50% of the votes cast on the resolution, so cannot be blocked by Lee acting alone.

Resolutions 17 and 18 require 75% shareholder approval, which means they will not pass without his approval. The AGM is being held on February 9.

Story Credited to Business Insider 01st February 2018.