Tony O'Reilly's Independent News and Media suffered a blow in its bid to take over Australia's APN News and Media after a key APN shareholder said it would vote against the offer.
Fund manager Perpetual, APN's second-largest shareholder, said in a brief statement it would vote against the deal at a shareholder meeting on Friday, potentially blocking the deal, and sending APN's shares down more than 3%.
Perpetual has previously said the revised offer was too low.
Perpetual, which has an 11.7% voting stake, cannot by itself block a takeover, but media reports have said another shareholder, Maple-Brown Abbott with 7.5%, might also vote against the deal.
Perpetual's decision would prevent the group led by Independent News from gaining full control, analysts said.
"Independent presumably is not going to get to a full takeover in its current form, but a deal could be structured so they pick up a greater stake without full take-out," said a portfolio manager at an investment bank, who asked not to be identified.
The deal is the latest in a string of Australian takeover offers to encounter stiff shareholder resistance, including failed high-profile bids for Flight Centre and Qantas Airways.
The comment from Perpetual follows media speculation that the fund manager would vote against the deal. Earlier on Monday, APN had asked Perpetual to clarify its position.
Dublin-based INM and private equity partners Carlyle Group and Providence Equity Partners (PEP) last month upped their offer for APN to value the company at A$3 billion (US$2.5 billion) after key shareholders, including Perpetual, criticized an earlier offer.
The new A$6.20 per share offer, Independent's fourth since October, cannot be raised again under Australian takeover laws because it has been declared final.
O'Reilly, a former international rugby player, is Ireland's best-known businessman.
Independent, which publishes 175 newspaper and magazine titles across the globe, plans to reduce its stake in APN to 35% from 42%, while Carlyle will hold 27.5% and Providence 37.5%.