UK - A rebel attempt to load the National Express board could prove successful unless pension funds act in the company's long-term interests, according to investor advisory groups.
PIRC, ISS and Glass Lewis this week all urged shareholders to reject proposals from the UK subsidiary of US activist hedge fund Elliot Advisors for the appointment of three new non-executive directors.
The hedge fund, which recently boosted its equity stake with the acquisition of additional shares, previously targeted the company with proposals for a merger, a break-up of the company and the deployment of assets to the US.
A statement from National Express described the three-way intervention as "a strong demonstration of support for the Group, its corporate strategy and its standards of corporate governance".
ISS had claimed the dissident shareholder had failed to meet the burden of proof that changes to a relatively new management board were warranted.
Shareholders including Co-operative Asset Management and M&G have already indicated they will vote against the three proposed nominees.
But PIRC spokesman Tom Powdrill said the vote at the AGM on 10 May "could still be tight" if Elliot Advisors, which holds around 17% of the shares, wins the support of the other major shareholder - the Cosmen family, which holds just over 17% of the firm through its European Express Enterprises vehicle.
A member of the Spanish family, Jorge Cosmen, is deputy chairman of the company. National Express acknowledges his membership of the nomination committee, as a non-independent director, as non-compliant with the Combined Code on Corporate Governance.
The rebel shareholders stand a chance if turnout is low. Powdrill said the vote - which he described as "a proper proxy fight" - could break down according to the timeframes of the shareholders.
"Compared with intermediaries, pension funds tend to regard themselves as long-term investors," he said.
"As a result, they might give the board the benefit of the doubt because they plan to hold the shares for a long time to come. On the other hand, another hedge fund might be selling in a year's time and could view their investment differently as a result."