The DX Group shareholder leading the charge against the company’s proposed acquisition of John Menzies' distribution arm has increased its holding in the company by 10%.

Gatemore Capital Management has upped its shareholding in the company from 11% to 21% in a bid to strengthen its position against the proposed deal and DX’s management team.

DX froze its shares on the AIM on 30 March after announcing it was in talks to buy Menzies, a move which Gatemore described as “very unusual” and a “face-saving exercise”.

The move came after Gatemore Capital Management called an extraordinary general meeting (EGM) to vote on the removal of DX’s board chairman Bob Holt and non-executive director Paul Murray, after the company saw a 90% decline in value over two years.

Following the increase of its shareholding, Gatemore Capital Management managing partner Liad Meidar told MT: “We believe in the company long term and we believe it’s clear that we’re going to be able to defeat the deal. So we wanted to take the opportunity to build our stake.

“And we want to send a stronger message in case they don’t understand it already that the deal is going to be defeated at the EGM.”

Meidar added that he thinks Gatemore has begun to change the attitude of other shareholders who were keen to sell up as soon as the business’s value increased again.

He said: “Some of the shareholders were fatigued. They’ve suffered a 90% decline in value. It’s a small part of their portfolio and they want to sell at the next up point they can achieve.

But we’re taking the view that it’s a very good asset we have here, and it’s being mismanaged. And slowly I think the shareholders that took that first view are starting to appreciate what they’re sitting on, and I think the tone has changed.”

Meidar reiterated Gatemore’s stance on the Menzies deal, which it has said it will block unless the deal is improved.

He added that he remains confident that Murray and Holt will be removed from the board eventually.

“I think it’s a matter of time, I think we’re going to give them a limited amount of time now to either show vast improvement in the deal or to terminate talks and let the shares float. If we don’t see either of those we’ll take the next steps.”

DX had not responded to a request for comment at the time of publication.