DEUTSCHE BORSE is facing another investor revolt as shareholders controlling more than half the German exchange’s stock have told the board they strongly oppose its plan to buy International Securities Exchange (ISE), a $2 billion (£1 billion) derivatives exchange in Chicago.

Heavyweight hedge funds, including TCI, Highfields Capital Management, Third Point, Lone Pine, Tiger and Tudor, have echoed the calls made in a letter from Atticus Capital to Deutsche Börse expressing their strong disapproval of the deal.

It is estimated that the funds together speak for 50%-60% of the total shareholder base.

Last week it emerged that Atticus, which owns an 11.7% stake, had said in a letter to the operator of the Frankfurt stock exchange, that it was “furious” at the company’s proposed $2.8 billion takeover of ISE and had lost confidence in its management.

This weekend, David Slager of Atticus told The Sunday Times: “We are not against Deutsche Börse doing deals in principle. But they must be done with financial discipline and benchmarked against doing a buy-back. What we mean is that if they can find a better deal than buying their shares back then fine. But this isn’t one of them.”

The other funds are just as aggressive. For instance, Third Point, the $4.2 billion New York-based fund, is run by Dan Loeb, whose withering public letters to company managements have become famous in corporate America.

Under German corporate law, Deutsche Börse does not need investor approval to buy ISE, but insiders said shareholders had warned the company they would seek to remove shareholder-elected members of the supervisory board if it continued to act without reference to its owners.

One investor said: “This company is unbelievable. After all they’ve been through with investors, they still refuse to consult us or listen to our reservations.”

In the letter dated May 4, Timothy Barakett, Atticus’s chief executive, and Slager, wrote that they were “especially concerned about management’s and the supervisory board’s emerging pattern of ignoring shareholder concerns and input . . . We have lost confidence in management’s financial and strategic discipline in analysing transactions”.

In a move that was strikingly reminiscent of its attempt to quash the investor rebellion of 2004, the Börse retaliated by declaring that the deal had unanimous support from the supervisory board.

A spokesman told reporters: “While some of our shareholders have expressed reservations . . . we are convinced this combination will create significant mid-term and long-term value for all of our stakeholders.”

TCI and Atticus are best known for blocking the Börse’s attempt to buy the London Stock Exchange and toppling its then chief executive, Werner Seifert, in the process.

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