EADS shareholder Lagardere told the Airbus parent on Monday to review the "unsatisfactory" terms of its planned USD$45 billion merger with BAE Systems, raising the pressure before a British regulatory deadline next week.
The French firm's demand marks another setback to the politically sensitive plan to create a European aerospace giant before the October 10 deadline, and adds to concerns already expressed in Germany.
However, some market-watchers suggested Lagardere was simply seeking better conditions for a future sale of its minority stake in EADS, rather than fundamentally opposing the deal with the BAE.
"Despite the industrial and strategic potential attributed to it, this plan has not yet demonstrated that it was creating value for EADS," Lagardere said in a statement.
Lagardere expressed dissatisfaction with the terms of the deal, under which EADS is currently due to get around 60 percent of the combined company.
"Lagardere considers that the merger conditions between EADS and BAE are currently unsatisfactory," it said. "Lagardere invites the executive management of EADS to proceed immediately with an indispensable review of the tie-up plan of EADS and BAE, taking better into account all the interests of the French reference shareholding in EADS."
Barring an extension, EADS and BAE have until Wednesday next week under UK takeover rules to set out detailed plans for the merger.
Lagardere holds 7.5 percent of EADS, half the French government's 15 percent, but is the senior partner on the French side of the Franco-German shareholder pact which underpins the group. Germany is represented by carmaker Daimler's 22.5 percent voting share.
"I think they just want the right parity for exit," one London-based arbitrage trader said of Lagardere's statement.
A spokesman for EADS declined to comment on the Lagardere statement.
Gravity always wins!