Some of Guinness Peat Group's larger investors say the company's demerger plans face defeat unless they listen hard to its sizeable New Zealand investor base.
GPG removed its New Zealand director Tony Gibbs for publicly opposing its plans to split its Australian arm into a separate business.
But Tyndall Investments and BT Funds Management say Mr Gibbs echoed the concerns among New Zealand's institutional investors, who doubted whether GPG's proposal would generate more wealth for shareholders.
With local shareholders estimated to make up about 70% of the company's investors, Tyndall Investments domestic equity manager, Rickey Ward, says GPG's proposed deal will be rejected.
Independent directors to scrutinise proposal
GPG is seeking to appoint up to three independent directors to scrutinise the proposal.
Milford Asset Management executive director Brian Gaynor says he's sceptical about whether the decision to appoint independent directors means real change.
"I think this is a really important test case for shareholders in New Zealand," he says. "This is the first time we've had a clear cut case where all shareholders - and by that I mean institutions plus retail investors represented by the Shareholders Association - should get together and form a common view and bring that common view to the company."
The Shareholders Association says GPG must consult shareholders about the appointment of new directors.
The assocation's chair elect, John Hawkins, says he has no faith that those remaining on GPG's board will find truly independent directors, if left to their own devices.
Meanwhile, Mr Gibbs says board members were split 3-2 on the restructuring plan, with he and fellow director Blake Nixon against it.
GPG says Mr Gibbs' preferred plan to return cash to shareholders by the end of the year and sell its threads firm is against outside advice and wouldn't be appropriate.
The company's stock fell 2 cents (3%) to 66 cents on Tuesday.