UK-based asset manager Threadneedle Investments has upped its stake in AZ Electronic Materials to above 11%. This level of ownership in AZ could block Merck's GBP1.56 billion takeover bid, according to the Telegraph.

Threadneedle is one of the top three AZ shareholders. The firm purchased the additional shares on Thursday and Friday, the report stated.

Threadneedle equity head Simon Brazier told the Telegraph: "As a top three shareholder in AZ Electronic Materials, we are disappointed that the board of AZ did not engage with shareholders prior to recommending the takeover offer by Merck. We are long term investors and believe the 403.5p per share offer significantly undervalues a business that has innovative, world-leading technology and extremely high levels of market share in the areas within which it operates."

On Thursday, Merck announced a recommended bid for AZ, a company that supplies materials for flat screen technology. The firm's chief financial officer said yesterday that they are committed to having 95% of AZ shareholder acceptances as a condition to the completion of the transaction, the Telegraph reported.