Deutsche Boerse's £1.35bn bid to buy the London Stock Exchange (LSE) is under threat from one of its investors that wants it to drop its takeover.
The London Stock Exchange is holding talks with both suitors
TCI Fund Management, which claims to represent funds owning 5% of the exchange, says it should return $500m (£350m) to shareholders instead.
TCI has asked Deutsche Boerse's board to call an extraordinary meeting of investors to vote on its proposal.
The LSE is the subject of rival offers from Deutsche Boerse and Euronext.
The company, headed by chief executive Clara Furse, is due to continue discussions with both interested parties about their proposed takeover bids in the next few days.
Deutsche Boerse oversees the Frankfurt Stock Exchange while Euronext operates stock markets in Paris, Amsterdam and Lisbon and controls the London International Futures and Options Exchange (Liffe).
TCI, which was set up in 2003, is also seeking to remove members of Deutsche Boerse's supervisory board elected by shareholders.
Deutsche Boerse is expected to meet on Monday to consider TCI's demands.
In a statement to the Frankfurt exchange, the company said that TCI claimed that Deutsche Boerse's proposed 530p a share offer for LSE "exceeds the potential benefits of this acquisition".
Instead, it wants the company to return excess cash reserves to shareholders.
Deutsche Boerse said the development would not change its bid approach.
"Deutsche Boerse is convinced that its contemplated cash acquisition of the London Stock Exchange is in the best interests of its shareholders and the company," it added.
Under German law, any shareholder with a 5% holding in a company is permitted to request an EGM if it has held its stake for more than three months.
The bid battle for the LSE began last month when the company rejected a £1.35bn cash takeover offer from Deutsche Boerse, arguing that it undervalued the company.
Euronext entered a fray soon after stating that it also wanted to acquire LSE, although it has yet to make a firm proposal.
According to newspaper reports, Deutsche Boerse's board has approved a proposal by chief executive Werner Seifert to raise the value of its bid.