One of the City's leading institutional shareholders last night turned up the heat on the mining giants Glencore and Xstrata by voicing fresh concerns over the pair's $90bn (£57bn) merger.
Fidelity Worldwide Investment, which owns shares in both companies, said the terms of the tie-up announced on Tuesday needed to be altered to win its full backing.
The fund manager, which has played a crucial role in a string of big money mergers and takeovers, added to a chorus of investors unhappy at the deal that currently offers 2.8 Glencore shares for every Xstrata share owned.
"We support the deal in principle but we think the terms need to be revisited," a Fidelity spokesman said.
The intervention is particularly bad news for Glencore and Xstrata bosses Ivan Glasenberg and Mick Davis because Fidelity owns a significant stake in both companies. Earlier critics, Schroders and Standard Life, spoke out as Xstrata investors and have little or no exposure to Glencore. Fidelity has a 2.3 per cent stake in Glencore, the powerful commodities trader, and 1.5 per cent of Xstrata, whose assets stretch from coal and copper to nickel production.
The two companies have been on an intensive investor roadshow since the deal was announced. Glencore already owns 34 per cent of Xstrata and is unable to vote its holding on the deal. As a result, only 16.4 per cent of Xstrata's shareholders need to vote against to block it.
Xstrata shareholders are thought to be holding out for a 20 per cent premium. Under the current terms, they will receive an 8 per cent premium compared to the price of both companies before it emerged that talks were under way.