Carphone Warehouse founder and chairman Sir Charles Dunstone is said to be unwilling to back the Dixons merger unless both firms are given equal weight.
He is apparently insistent that the potential deal must be structured as a 'merger of equals', reports The Telegraph.
But Dunstone and forner COO David Ross own around one third of Carphone Warehouse and could block the possible merger.
It's possible a 'merger of equals' could happen, if shareholders agree, bearing in mind that as of yesterday Dixons Retail has a market cap of £1.84 billion and Carphone Warhouse has a similar cap at £1.92 billion.
Dixons and Carphone Warehouse are required to either announce a firm intention to make an offer by 5pm on March 24th 2014, or to announce that either do not intend to make such an offer.
A top 15 investor in both retailers said: “Dixons has known for a while it needs to be much better at connected devices. It needs the relationship with [mobile phone] networks which Carphone Warehouse can bring."
UPDATE (May 16th 2014):Dixons Retail and Carphone Warehouse confirm they will merge in a £3.8 billion deal.