TaemasBridge has threatened to withdraw its bid for Babcock and Brown Capital (BCM) if the proposed compensation package and termination rights for BCM chief executive Andrew Day are approved by shareholders.

BCM shareholders are due to vote on resolutions that contain the package and termination rights at a meeting on Monday 27 April.

"TaemasBridge does not believe that it is appropriate to continue with its current proposal where those resolutions are passed," TaemasBridge executive chairman Robert Topfer wrote in a letter to BCM chairman Kerry Roxburgh.

"BCM shareholders should be made aware that in those circumstances the TaemasBridge proposals will be automatically withdrawn."

TaemasBridge, a takeover vehicle consisting of several former Babcock executives, has also sent a letter to BCM shareholders informing them of its intention.

TaemasBridge co-founder John Shin said the bid should be seen as a restructuring of BCM in order to drive costs down.

His main objection to the package is that it is not linked to the performance of the chief executive and would increase the costs of running the business.

"If there is an increased cost of management ... our bid would have to be revisited," he said.

The company made an offer of $1.05 per share for BCM, valuing the company at $175 million, on 15 April.

TaemasBridge would not come back with a lower bid if shareholders approve the pay package.

"At this time, we would just walk away," Shin told InvestorDaily.

But BCM is unlikely to make any changes ahead of the shareholder meeting.

"The meeting will go ahead on Monday with the resolutions as they are," BCM spokesperson Erica Borgelt said.