Proxy Governance, a Vienna, Virginia-based firm that researches takeovers for institutional investors, warned Providian shareholders unhappy with the $6.45 billion deal that they would be making a costly and risky bet if they heeded the advice of San Francisco-based Glass Lewis & Co., another takeover research firm.

During a conference call with clients late Thursday, Glass Lewis & Co. reiterated a recommendation it made last week that Providian shareholders consider exercising their rights under Delaware law to have a court determine the fair value of their shares rather than voting in favor of the deal.

Those rights, known as appraisal rights or dissenters rights, essentially permit shareholders to opt out of the terms of the deal. Those who choose to do so agree instead to accept what a Delaware court determines to be a fair price.

Glass Lewis & Co. said the median premium that dissident shareholders have received as a result of the process in the past was 20 percent above the deal price. But it acknowledged that the process was "somewhat convoluted" and should be "approached with some caution."

Washington Mutual's proposed purchase of Providian, which inaugurated what has become a summer of consolidation in the credit card industry, has turned into one of the year's more controversial deals because Washington Mutual's $18.71-a-share offer price represented a 4.2 percent premium to the stock's last closing price prior to the announcement.

Several shareholders, including Putnam Investments, which controls 7.5 percent of Providian's shares, believe the price is too low and have come out against the transaction, as have at least two leading investor advisory services: Glass Lewis & Co. and Egan-Jones.

But Proxy Governance, which like Institutional Shareholder Services has recommended the merger be approved, said that by throwing the issue to the courts, Providian shareholders were exposing themselves to "a not insignificant possibility" that they would get a lower price for their shares than Washington Mutual is offering.

It warned that while Delaware does not have a definitive approach to determining share value in such proceedings, it requires the appraisal to be based on the company's value as a "stand-alone entity."

"Any value attributable to synergies or benefits from the merger itself -- value generally reflected in a takeover price -- is subtracted to obtain the 'fair value' for appraisal purposes," Proxy Governance warned.

What's more, Proxy Governance said that if enough shareholders pursued the appraisal option, the number of shares needed to approve the merger might not be delivered next Wednesday, when shareholders are scheduled to vote on the deal. If the deal is aborted, it argued, Providian shares could slide lower.

"We believe that advising a vote against a merger as a general recommendation for all shareholders -- with the expectation that the transaction will be approved and provide the opportunity for price improvement in the courts -- is not prudent," Proxy Governance wrote.

"It is especially imprudent in this case, where any benefit from appraisal rights seems elusive."