Two days ahead of an important regulatory deadline for the proposed merger of EADS and BAE Systems, another roadblock has appeared in the form of a major BAE shareholder publicly slamming the deal.

Invesco Perpetual, an investment fund and BAE Systems’ largest shareholder with a 13.3 % stake, released a statement timed to come little more than a day before the decision was due, describing “significant reservations regarding both the [merger] proposal and its long-term impact on value for BAE Systems shareholders.” The group goes on to say that it “does not understand the strategic logic for the proposed combination.”

Invesco Perpetual is concerned that the deal would “materially jeopardize BAE’s unique and privileged position in the United States defense market and has been unable to identify any corresponding benefits to offset this.” It also feels that “the level of state shareholding in the combined group will heavily impair its commercial prospects — especially in the United States — and result in governance arrangements driven more by political arrangements than shareholder value creation.”

Invesco Perpetual cannot block the merger, but its concerns reflect worries voiced by other stakeholders too, including major EADS shareholder Lagardere Group.

The most serious issue that EADS and BAE Systems is facing, however, is that so far there isn’t even any political arrangement that would enable the merger. The U.K.’s defense minister, Philip Hammond, said over the weekend that he was willing to accept German and French shareholdings in the combined group. But he told the BBC that “it is necessary to reduce that stake below the level at which it can control or direct the way the company acts.”

France currently has a 15% stake in EADS. Germany is not a shareholder, but it is in the process of buying 15% from Daimler and possibly another 7.5% held by a banking consortium. Lagardere Group also wants to sell, and if the French government bought its 7.5% stake, the French and German governments would effectively control 27% of the combined group after dilution. That is more than the 25% they would need for far-reaching veto rights.

There is conflicting information about the intentions of the French government. Industry sources indicate France has already agreed not to buy the Lagardere stake, but the U.K. government still insists on written guarantees and it is unclear whether those have already been given. Germany also wants to enter as a shareholder even though a minority stake below the veto threshold of 25% would not give it any additional rights.

EADS and BAE Systems say they will only apply for an extension of the deadline if they notice significant progress in the prior negotiations. EADS stated Oct. 8 that it is currently evaluating whether there is tangible progress on the government side that would justify hopes to be able to come to an agreement.

Separately, the governments are still wrangling about issues such as where headquarters and divisions should be based. German Defense Minister Thomas de Maiziere is said to have demanded shifting Eurocopter’s headquarters from France to Germany. Some conservative members of parliament also demanded that the entire group be headquartered in Germany, given the fact that the civil aircraft programs will be based in Toulouse and the defense business is expected to be run out of the U.K.