The controversial deal now faces a real prospect of defeat when shareholders vote on Wednesday. Farnell needs support from 75 per cent of those for it to proceed.
Norwich Union, which owns more than 3.5 per cent of Farnell, is concerned over the high price Farnell will pay, and the financial risks the merged business will carry.
Its concerns are understood to be similar to those expressed by other fund managers. Legal & General added its name to the rebels on Friday, saying it saw the risks outweighing the advantages. David Rough, head of investment at Legal & General, said he wants Farnell's board to renegotiate the terms. The underlying commercial logic of the deal, he said, was acceptable.
Standard Life, in a highly unusual move, made public its concerns on Thursday, when it declared it would vote its 2 per cent holding against the deal.
The Prudential, which owns 6 per cent, is also dissatisfied. In total, up to 13 per cent of the votes could be against Farnell. Because not all shareholders will vote, the balance tilts towards the rebels.
Some major institutions, however, who are in favour, including Mercury Asset Management, Fleming and Schroders, who together represent 24 per cent of the votes. Another shareholder, with 1.5 per cent of the shares, who will also vote for the deal, said: "You start from the assumption you will back the management, and that they know what they are doing."
The decision by institutions to air their intentions in public reflects a growing awareness of the corporate governance issues at stake in such votes.
Pensions and Insurance Research Consultants, an advisory service for investors, has recommended that its clients vote against the deal. PIRC has gained a reputation as a campaigner for shareholder rights, and the duties of shareholders in corporate governance. It will have five voters lined up at the EGM in Wetherby, West Yorkshire, to ensure there is a full count, not just a show of hands.
PIRC consultant Anne Simpson said the deal failed on several grounds. A "reverse poison pill", whereby Farnell pays Premier shareholders $50m if the Farnell board withdraws its recommendation for the deal, was particularly objectionable.
The offer astonished the City when it was announced. At twice Farnell's market value, it would catapult the enlarged group, Farnell Premier, to within spitting distance of FT-SE 100 status. After writing off pounds 1.6bn of goodwill, the new company will be left with negative shareholders funds of pounds 132m, and be burdened with pounds 450m of debt.Reuse content