Activist hedge fund Laxey Partners has sought an interim order from the Takeovers Panel for the suspension of a non-renounceable rights issue of the listed MacarthurCook Property Securities Fund (MPS).

The hedge fund claims the rights issue would give the responsible entity (RE) of the MacarthurCook fund, AIMS Group, a greater control over the business, while diluting other shareholders, including Laxey Partners.

"Laxey Partners submits that the rights issue is highly dilutionary and has been structured to consolidate the responsible entity's control," the hedge fund said in an application to the Takeovers Panel on Friday.

Earlier this month, another shareholder of MPS, BlackWall Property Funds, tried to remove AIMS Group as the RE.

Laxey Partners also argued that the rights issue has been designed to frustrate the attempt to remove the RE.

In a company statement, MacarthurCook said Blackwall is conflicted in its request, because an Australian Securities Exchange (ASX) listed trust of Blackwall is currently being sued by MacarthurCook over alleged breaches of contractual obligations.

Laxey further claimed that the financial benefits given to the RE as part of the underwriting arrangements were unacceptable and that the arrangements were not entered into on arm's length terms and would require shareholder approval.

MPS only announced the rights issue earlier on Friday, in which it sought to raise $5.87 million.

Under the terms of the offer, shareholders would receive 13 new units in MPS, for every 15 units they currently hold.

The new units will be offered at a 51.9 per cent discount.

The proceeds will be used to pay off existing debts with the Singapore-based bank OCBC.

AIMS holds 12.1 per cent in the MacarthurCook fund, while Laxey holds 5.02 per cent in the fund.

MacarthurCook said if all unit holders take up their entitlements the relevant interests will not change, the statement said.

If only half of the unit holders take up the offer, than AIMS interest will rise to 27.7 per cent, while Laxey's interest will increase to 11.5 per cent.

If no unit holders other than AIMS and Laxey take up the offer, AIMS' interest will increase to 39.3 per cent, while Laxey's interest will increase to 16.3 per cent.

AIMS denied that the offer gives rise to unacceptable circumstances, but acknowledges that the Takeovers Panel may make orders stopping the offer from proceeding.

AIMS acquired MacArthurCook Funds Management, the investment manager of MPS, in July 2009.