F&C intends to vote against Prudential's proposed acquisition of AIA amid increased investor opposition to the deal.
The group, which owns just under 0.7% of the insurer, says it has made the decision independently of the action group set up by Neptune's Robin Geffen, which has secured 20% of shareholders to vote against the transaction.
Shareholders owning 25% of the company are needed to block the deal.
This morning the insurer has said it is in discussions with AIG over altering the terms of its controversial £24.5bn takeover.
However, as the deal stands, F&C says it has concerns about the cost of the deal and Pru's ability to deliver the promised synergies and savings.
"We are not concerned about the group's capital position, which we accept would likely improve on the back of the disposals which have been announced," F&C head of UK equities Peter Lees says.
"We do however feel that the transaction involves very significant execution risk, given its sheer scale and complexity. In our view these risks, when set against the current price of the transaction, leave virtually no margin for error in the delivery of revenues and cost synergies.
"Therefore, while we are supportive of the strategic direction management is trying to take the company in, regrettably the economics of the deal as it stands mean we are unable to support the transaction."
Paul Mumford, a senior fund manager at Cavendish Asset Management, also intends to vote 'no'.
"Even if Prudential's management is able to renegotiate the price, the confidence of shareholders as to the merits of this untenable deal has been lost," he says.
"Even with a smaller price-tag, this is just too expensive and too risky a deal to ask investors to back in this market. The Pru has woefully misread the appetite of shareholders to back both a deal of this size and of this complexity."
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