Malaysia's Killinghall is seeking to replace four directors of Southern Bank to end a deadlock over a hostile takeover bid by predator Bumiputra-Commerce Holdings.

"The board views the protracted disagreement between Bumiputra-Commerce and the Southern Bank board as potentially value destructive," said Killinghall, which owns a controlling stake in Southern.

"Given the current circumstances and urgency of the matter, the board has decided to exercise the rights of the company as a major shareholder of Southern and call the following extraordinary general meeting," Killinghall said in a statement to the Malaysian stock exchange.

Killinghall owns about 17 percent of Southern.

Malaysia's second-largest financial group Bumiputra-Commerce Holdings has made a RM6.35 billion (US$1.7 billion) hostile bid for Southern Bank, the country's second smallest by assets, after merger talks broke down.

Extremely disappointed

Southern had rejected the offer, saying it was too low. There has been intense speculation that it is seeking a merger with top Malaysian lender Maybank.

Killinghall said it was "extremely disappointed with the decision of Southern's board."

"The Southern board should not stand in the way and should not be afraid to bring this important decision to the shareholders of Southern," it added.

"As the ultimate owners of Southern, it is the shareholders of Southern who should be called upon to decide the fate of Southern's future."

Killinghall is controlled by the ruler of Malaysia's central Selangor state, Sultan Sharafuddin Idris Shah and former Southern chairman Syed Mohamad Yusof Syed Nasir.