PARIS (Reuters) - French minority shareholders' group Adam has written to PSA Peugeot Citroen
The letter to Peugeot's chairman questions the terms of a proposed 3 billion euro ($4.1 billion) capital increase that will see Dongfeng <0849.HK> and the French government investing on equal terms, the report said.
"The sizeable portion taken up by the state may ward off other potential investors and make it more difficult to seal alliances with other carmakers," Les Echos quoted the letter as saying.
Adam suggests that neither Dongfeng nor the French state take part in the capital hike if banks are willing to subscribe to the rights issue. Otherwise, it writes, the French state, Dongfeng and the Peugeot family should launch a combined takeover offer for the company.
Last month Thierry Peugeot reportedly wrote to his cousin Robert Peugeot, head of the FFP family holding, to also criticise the tie-up that would dilute the family's influence.
Adam could not immediately be reached for comment. Peugeot declined to comment.
(Reporting by Lionel Laurent; Editing by Natalie Huet and Mark Potter)