The Qantas kangaroo is one of the world's best-known airline logos

Balanced Equity, which owns a 4% stake in the airline, said it would not back the bid and analysts have warned that more shareholders may now follow suit.

The offer has come from a consortium led by Macquarie Bank and needs more than 90% of shareholders to approve it.

Qantas has warned that blocking the bid would destabilise the company.

The company's shares dropped by as much as 6% in Sydney on the news.

'Unwinding'

"About 60% of the stock is now held by hedge funds and other institutions and it's difficult to know what their intentions are," said Derek Sadubin, an analyst at the Centre for Asia Pacific Aviation.

"This would suggest that the momentum behind the offer is unwinding," he added.

UBS Global Asset Management owns more than 6% of Qantas and has criticised the bid price as being too low. Press reports on Friday said that UBS was also planning to reject the takeover offer.

"I think it's time UBS told us what they're going to do," said Rob Patterson of Argo Investments Fund Manager.

The sale of Qantas has the backing of the Australian government but has run into opposition from politicians, investors and unions.

The bid group, Airline Partners Australia, said it was mulling a "range of alternatives", adding that about 29% of shareholders had accepted its offer.

As well as Macquarie, the takeover group includes Texas Pacific Group, Allco Equity Partners, Allco Finance Group and Onex Corp.