Failed former Pilbara iron ore miner Murchison Metals has asked investors to support its buy back of shares before the company is wound up, but its largest shareholder won't be involved.
Mercantile Investment, the listed investment arm chaired by corporate raider Sir Ron Brierley and 17 per cent shareholder, rejects the plan as it stands.
Sir Ron recently successfully sought the departure of two Murchison board members including managing director Greg Martin and replaced them with his own representatives.
Murchison Metals said in a statement on Friday that it expects to offer to buy back its remaining issued shares at four cents to 4.2 cents per share ($18 million to $19 million).
The shares had dropped by 0.1 of a cent to four cents on Friday, having fallen 87 per cent ($117 million in shareholders' value) from the 30 cent level they reached in 2007 before the global financial crisis hit.
Murchison got into trouble in mid-2011 when it could not get funding it had hoped to attract from Chinese interests for the $6 billion Pilbara Oakajee Port and Rail project it was a major partner in.
It was forced to sell its interest in that and its producing Jack Hills iron ore mine to joint venture partner Japan's Mitsubishi for $325 million.
While the company was expected to de-list with liquidators appointed soon, the move by Sir Ron to nearly double his stake to 17 per cent in November has raised speculation he may have his own plans for the shell company.
Murchison said that the board believed the proposed buy back offered shareholders a choice between exiting their investments in the company and retaining their shares.
IG Markets market strategist Stan Shamu said there appeared little incentive for investors to back a buyback that offered no premium to the current share price.
"You need to offer them something that's a little bit attractive to feel like they need to palm them off ... you do it strategically but give a bit of premium as well," he told AAP.
The offer would need a majority of shareholders to approve the plan, with Mercantile's 17 per cent likely opposed and second-largest shareholder, Korean steel giant POSCO (13.45 per cent) yet to decide.
Sir Ron has accused Murchison of claiming unprecedented expenses for a company being wound up of $7.64 million out of $27 million left.
Murchison hit back saying that includes one-off legal fees to settle disputes, tax and operating costs.
It has already returned about $207 million (46 cents per share) to shareholders.
Murchison director and spokesman (and Mercantile director) Gabriel Radzyminski did not return calls for a comment.
A meeting to discuss the proposed buyback is due to be held after February 20.