Indonesia's influential Bakrie family warned on Monday that it could rethink its proposed exit from Bumi, a coal venture it co-founded with Nat Rothschild, if the financier pursues a planned return to the board.
A Bakrie decision to dig in as a result of changes proposed by Rothschild and his supporters could delay efforts by the coal company's board - and by the financier himself - to split with the Indonesian family and start afresh.
The former partners have been at loggerheads for months in a bitter battle over the group and its future, exacerbated by a legal inquiry into wrongdoing at the Indonesian operations, telephone-hacking allegations and tumbling coal prices.
The Bakries said in October they planned to draw a line under their London venture, which began in 2010 with the aim of bringing promising Indonesian mining assets to London investors. They said they would pull out of London-listed Bumi and tabled a proposal that would allow them to take back operational assets they brought in.
Nat Rothschild, however, hopes to keep Bumi alive and has sought to counter part of that plan.
Last week, Rothschild, scion of the European banking dynasty, called for a meeting to allow investors to vote on a plan to oust 12 of 14 board members. A proposed new board would include himself and be led by Wal King, the former boss of Australian contractor Leighton Holdings.
"(The Bakrie family) will seriously consider the withdrawal of its offer in the event that Mr. Rothschild follows through his proposal to change the board or indeed if the company fails to honour all obligations under the relationship agreement," the Bakries said in a statement on Monday.
Under the terms of the original 2010 deal, a "relationship agreement" allowed the Bakries to appoint key positions such as chief executive and chairman.
Current Chairman Samin Tan, a coal tycoon who came in a year ago when he invested $1 billion to pull the Bakries out of a debt crunch, has indicated he could step down.
Raising Stakes
Rothschild, who raised his holding in Bumi on Monday in a show of confidence, dismissed the Bakrie threat and pointed to the politically connected family's debt burden as proof they could not follow through. The 2010 relationship agreement, he said, would not stop shareholders from replacing the board.
(Watch Now: Bumi's Board Battle)
"The Bakries' threat to remain in occupation of the Bumi register if they do not get their way is juvenile in the extreme," a spokesman for NR Investments, Rothschild's vehicle, said in a statement.
"Threatening minority shareholders is not the right way to win their support in a British proxy vote - particularly when the Bakries' shares in the Plc are, in any case, held as security against their debts by their lenders."
All sides, including Bumi's board, agree the Bakries should carry out the first stage of their dissolution plan, which involves exiting their shareholding and taking a minority stake in miner Bumi Resources held by Bumi. That would be partly in exchange for their Bumi shares.
The Bakries, together with Samin Tan, hold just under 30 percent of the voting rights of Bumi. NR Investments, after Monday's increase, holds 14.8 percent of voting shares.
Nat Rothschild's proposal, set to be detailed to more institutional investors this week in a charm offensive to increase support, is backed by shareholders, including Schroders and Taube Hodson Stonex (THS) Partners, two of the top institutional investors in the miner.
THS Partners fund manager Cato Stonex said the group, which owns around 2 percent of Bumi, currently supports the Rothschild plan for improved corporate governance and hopes to "depersonalize" the situation at Bumi.
"We are very grateful to the independent directors who stabilise the position and (pursue) our interests ... but as far as coming up with a new plan, there will come a time when we need a new board," Stonex said, adding that Rothschild's proposed directors were "a decent bunch."