Lagardere, a major shareholder in EADS, has blasted the terms of its proposed merger with BAE Systems as "unsatisfactory", prompting a backlash from EADS investors.
Lagardere, which in 2005 sold half of its original 15% stake in EADS, said in a statement on Monday - 10 days before the formal merger agreement is presented - that EADS needs to demonstrate how the merger would create value.
Shares in EADS have dropped 17% since the plan was announced, equal to a combined $5.26bn in market value, Bloomberg reported.
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The two defence firms are proposing a $45bn - £28bn - deal, but this has proved controversial due to concerns over national security and job losses.
It would create a defence giant with a 60/40 post-merger weighting in favour of EADS.
In the statement, Largarde said: "Lagardere calls on the management of EADS to undertake, without delay, the indispensable re-examination of the project to combine EADS and BAE, to better take into account the interest of all the French controlling shareholders of EADS."
EADS's major shareholders also include German company Daimler and the French state, and together hold a 44% stake.
Daimler's Chief Executive, Dieter Zetsche, has previously stated that it wants to focus on its automotive business, saying: "It's not our key responsibility to define the future strategy of the aerospace industry."
Stephan Boehm, a Commerzbank analyst, said that rather act as a deal breaker, Lagardere's comments "are in line with what Daimler has already communicated".
"I think there is still room to maneuver and to come up with a slightly more favorable ratio for EADS shareholders," he added.
BAE's share price rose 0.68% to 327.30p on Monday lunchtime, while EADS was up 1.22% to €24.96.
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