A group of external shareholders have refused to accept the terms of Lake Capital’s offer because they believe it is unfair that they have been offered a lower value per share than current employees.
The difference between the offers is understood to reflect the fact that ex-employee shareholders are being paid in cash, whereas current employees are being offered shares in the new entity.
The dissenting 72-strong group hold a combined 29 per cent of Engine shares.
Engine needs 75 per cent of shareholders to agree for the acquisition to go through, meaning the rebels are able to block the deal.
The deadline to agree to the offer was 5pm on Wednesday. But, as Campaign went to press, the ex-employees were continuing to hold out.
The rebels expressed their concerns about the deal to Engine and demanded the same terms as current employees. But Lake Capital has not entered into negotiations with the group and has refused to change its offer.
The spokesman for the group said: "We, as a group of external shareholders, feel we are being treated unfairly and prejudicially on the basis of the treatment in the offer between external minority and internal minority sellers. Through our advisors, we have approached Engine for a fairer deal that has not been forthcoming so far.
"We hope Engine and Lake will recognise that our belief that we are being unfairly treated deserves address. Unfortunately, our group will not accept the current deal as it stands, so it is unfortunately likely that the deal will fail when the offer deadline falls this evening."
An Engine spokesman said: "We are not going to comment on what is a private company matter."
Read Jeremy Lee's comment here.