LONDON/PARIS (Reuters) - An activist hedge fund has criticized plans by Walt Disney DIS.N to take full control of debt-laden Paris theme park operator Euro Disney EDLP.PA, according to a letter seen by Reuters.

FILE PHOTO: Visitors walk towards the Sleeping Beauty Castle during a visit to the Disneyland Paris, France, January 21, 2015. REUTERS/Gonzalo Fuentes/File Photo - RTX30GBA

Paris-based CIAM, which owns 1.4 percent of Euro Disney shares, has written to the board of the French company to object to what it believes are plans by Walt Disney to force out minority shareholders. It said it has the support of more than 5 percent of Euro Disney shareholders, including its holding.

“The Walt Disney Company seeks to force out the remaining minority shareholders by offering them a new public offer, under penalty of having to undergo a strong dilution later,” said the letter, dated March 6.

CIAM has not declined Walt Disney’s offer but is monitoring the situation, a source familiar with the matter said.

Euro Disney defended the terms of the Walt Disney takeover.

“Given the financial challenges faced by Euro Disney, The Walt Disney Company has developed a long-term solution that takes into account all stakeholders,” it said in a statement.

“We believe such an operation will provide Euro Disney with a strong financial footing to continue its strategy, while providing minority shareholders the opportunity to exit at a significant premium,” it added.

Walt Disney last month announced plans to take full control of Euro Disney, after raising its stake to 85.7 percent through a deal with Saudi billionaire Prince Alwaleed bin Talal.

Walt Disney has said it would also support a recapitalisation of up to 1.5 billion euros, helping cut debt and improve Euro Disney’s financial position.

Minority shareholders will be offered 2 euros ($2.13) a share to sell their stake to Walt Disney - a 67 percent premium to Euro Disney’s share price on Feb 9, which was the day before the offer was announced.

Walt Disney will buy out and delist the remaining shares from the Euronext Paris stock exchange if it gets to a stake of at least 95 percent. The shares stood at 1.99 euros on Tuesday.

Disneyland Paris opened in 1992 and has struggled financially for much of that time, after making overly optimistic visitor projections and taking on too much debt.

Deadly attacks in Paris in 2015 by Islamist militants also hit the broader French tourism sector, and Euro Disney racked up a net loss of 858 million euros in 2016.