Hedge funds that had banked on a German court approving the purchase of Ruhrgas, the gas distribution company, by utility giant E.On have lost out heavily after the €10bn ($10bn) deal suffered another setback.

The Düsseldorf Commercial Court refused to lift an injunction blocking the acquisition, prompting a 7% fall in E.On shares on Wednesday. That meant huge losses for funds that had bought E.On stock hoping the injunction would be dropped.