A group of investors in TransAlta Corp. (TA.TO) plans to nominate directors to the board of the Canadian power producer because they think it may be able to find better deals than an investment from Brookfield Asset Management Inc., according to people familiar with the matter.

The group, comprised of Mangrove Partners and an entity controlled by C. John Wilder’s Bluescape Energy Partners, will put forward five people for TransAlta’s board, according to a statement late Monday from the Calgary-based company.

“TransAlta will review Mangrove’s notice, consider the suitability of its nominees and communicate fully with its shareholders in due course,” the company said in a statement.

Representatives for the activist group and TransAlta declined to comment Tuesday.

The investors, who collectively hold more than 10 per cent of TransAlta, have yet to fully evaluate the investment by Brookfield, but believe there might be better offers in the market, the people said, asking not to be identified because the matter is private. The group hasn’t decided whether to launch a proxy fight, the people said.

Brookfield’s agreement will see it invest in TransAlta and nominate two directors to the board. Brookfield may also increase its stake in the company to 9 per cent under certain circumstances. The deal allows Brookfield to convert its investment into an equity interest in TransAlta’s Alberta water power assets at a later date and the proceeds will be used to accelerate TransAlta’s transition to clean energy and to buy back shares.

The investment is being made through Brookfield’s publicly traded renewable-energy arm, Brookfield Renewable Partners.

Under the terms of the investment, if more than two directors are elected outside of the company’s slate, TransAlta has the right to reject the financing arrangement with Brookfield. The activists believe that electing their directors will preserve their right to pursue a superior transaction.