A key proxy adviser firm recommended Eldorado Gold investors vote against its C$3.8-billion bid for Foran Mining, the latest roadblock after Eldorado’s third-largest shareholder called the takeover too expensive.

Glass Lewis & Co. said Eldorado shareholders would end up with a smaller stake in the combined company than the value it’s contributing under the stock-and-cash deal, according to its report published Thursday.

The recommendation contrasts with a report from advisory firm Institutional Shareholder Services, which earlier this week urged investors in both Eldorado and Foran to back the takeover.

Shares in the companies — both based in Vancouver — each climbed more than 3% in Toronto on Friday. The moves followed 9.7% drop in Foran’s stock on Thursday, while Eldorado shares closed 3.9% lower.

Eldorado agreed in February to acquire Foran, part of a wave of mining deals as companies look to boost output after a sharp rally in metal prices over the past year. Eldorado, which owns projects in Canada and Europe, offered a mix of cash and shares to buy all of Foran’s stock in a no-premium transaction.

The deal would give Eldorado greater exposure to copper through Foran’s McIlvenna Bay project in Saskatchewan, where first output is scheduled for the middle of this year. The combined company is expected to be weighted about 77% toward gold, 15% toward copper and 8% toward other metals. Miners have raced to secure copper as demand rises amid the electrification of the global economy, with deposits becoming harder to find and more costly to develop.

While bringing together the portfolios would “meaningfully contribute” to growth and cash flow in the coming years, Eldorado would be paying a “relatively high valuation for a single-asset mining firm that is still transitioning to commercial production,” Glass Lewis said, referring to McIlvenna Bay. That, it added, also introduces operational complexity for Eldorado as it faces delays at its Skouries gold-and-copper project in Greece.

In an emailed statement on Friday, Eldorado said Glass Lewis’ assessment does not fully reflect the deal’s “long‑term strategic and economic merits” nor the “significant value creation opportunity” it would deliver for Eldorado shareholders.

Spokespeople for Foran didn’t immediately respond to requests for comment.

The Glass Lewis report comes after Eldorado’s third-largest shareholder, L1 Capital, sent a letter dated March 21 to the board requesting that the miner terminate the proposed deal, adding that if the company proceeds with the plans the firm would vote against the tie-up at a shareholder meeting scheduled for April 7.

“We do not often speak out so strongly on transactions, but we feel compelled in this case, particularly given Eldorado is a significant position in our fund,” L1 Capital Co-Chief Investment Officer Raphael Lamm said in an emailed response to Bloomberg News. “The proposed Foran transaction is one of the most value-destructive deals we have seen in decades of investing in the mid-cap mining sector.”

Still, other investors have signaled support for the transaction. British Columbia Investment Management Corp. — which held less than 0.1% of Eldorado as of December 31 — said it had voted in favor of the deal.

Institutional Shareholder Services — which issued its own assessment of the tie-up on Wednesday — described it as “disciplined” and strategically aligned with Eldorado, saying it would strengthen the mining company’s long-term growth profile.