Shareholders in Real Estate Opportunities have rejected a motion that would allow Treasury Holdings increase its stake in the company without mounting a full bid.

The motion, was one of three put at an extraordinary general meeting held in Jersey yesterday. Treasury, which has a 45 per cent stake in REO sought a waiver from its obligation to make a takeover bid if its stake increased as a result of the company buying back its own shares.

The resolution failed with 13,185,467 votes in favour and 60,742,513 against.

Prior to the meeting the two other large shareholders in REO has signalled their opposition to the move.

They are London-based bank Dawnay Day, which holds just under 30 per cent and Dublin solicitor Mr Noel Smyth who holds around 10 per cent.

Both Mr Smyth and and Mr Guy Naggar of Dawnay Day attended the meeting yesterday. Dawnay Day has objected to the buyback as it allows Treasury increase its stage without putting up its own money.

It also has the effect of pushing up Dawnay Day's stake over the 30 per cent threshold at which it must either bid for the company or reduce its holding.

There were repeated questions to the board as to why shareholders should vote for the resolutions.

The chairman, Mr Ray Horney, said at this stage they were only asking for the right to buy back, not to exercise that right.

Two other resolutions were put to the meeting. A resolution authorising the company to buy back up to 14.99 per cent of its shares in the market failed to get the required two thirds majority.

There were 84,910,282 in favour and 58,520,487 voting against.

A third resolution allowing the company buy back its Zero Dividend Preference shares was passed.