Two investors in Ritchie Bros. Auctioneers Inc. are ratcheting up the battle over the industrial giant’s proposed takeover of IAA Inc.

Fred DiSanto, CEO of Ancora Group, spoke to BNN Bloomberg on Wednesday about his company’s support for Richie Bros plan to buy auto-salvage company IAA. During the interview, he took aim at fellow shareholder Luxor Capital Group, which has come out against the looming transaction and launched a proxy battle to oppose it.

“I do think we are a fan of this deal,” DiSanto said in a Wednesday interview.

“We have always thought IAA is a good business, but it needed a good strategic partner, which we think Ritchie Brothers is …. we want to be a long-term investor in the combined entities.”

Ritchie Bros. first proposed a US$6-billion cash-and-stock offer for IAA last November, and then put forward an amended proposal in January for a slightly lower cash value and one-time dividend for shareholders.

It is now offering IAA shareholders $12.80 per share in cash and 0.5252 common shares of Ritchie Bros. for each share of IAA common stock they own, adjusted from the older offer of US$10 per share in cash and 0.5804 Ritchie Bros. shares for each IAA share.

New York-based Luxor Capital has urged shareholders to vote against the deal, arguing that Ritchie is more valuable as a standalone business and accusing executives of manipulating projections to make a stronger case for the acquisition. 

Bloomberg News reported Wednesday on Ritchie CEO Ann Fandozzi’s response to Luxor’s allegations. In a draft letter to shareholders, she called Luxor’s case “factually incorrect and based on fundamentally flawed analysis."

DiSanto also criticized Luxor’s stance on Wednesday.

“Luxor came out against the deal and all of a sudden doubled their position in Ritchie Bros,” he told BNN Bloomberg. “Then Luxor had to announce in a proxy agreement that they signed a trading agreement with Fir Tree, a known short seller. If you look at the document they provided to the public … they talk about IAA going down 30 per cent and Ritchie Bros. going up 10 per cent should there be no deal. I don’t know what their angle is but to me it doesn’t make much sense.”

In a statement to BNN Bloomberg, Luxor characterized the comments from Ritchie Bros and Ancora as “attacks” that “reek of desperation.”

“Not only are Ancora’s inferences completely false and lacking any basis, but they show just how desperate Ancora and Ritchie Brothers are to provide cover for a deeply flawed and value destructive transaction,” the company said in an emailed statement.

“As we previously stated in our letter to shareholders, Luxor is not short IAA, nor do we have any agreements, contracts, or other means of expressing that position. Luxor is just one of the many Ritchie Bros shareholders who have spoken out publicly against the merger with IAA.”

Shareholders in both companies will vote on the deal on March 14.

With files from Bloomberg News.