US hedge fund Elliott Associates said it has commenced legal proceedings to block the merger between two key affiliates of South Korean conglomerate Samsung.
Construction company Samsung C&T earlier agreed to be taken over by Cheil Industries, in which Samsung Electronics vice-chairman and heir apparent Lee Jae-yong is the major shareholder. As per the deal, each Samsung C&T share will be exchanged for 0.35 of a share in Cheil Industries, valuing the acquisition target at more than $8bn (£5.2bn, €7.3bn).
The merger is widely seen as the family's attempt to ensure control of the group, ahead of an expected leadership succession. The group's chairman Lee Kun-hee has been bedridden following a heart attack in May 2014.
Elliott, which recently increased its stake in Samsung C&T to 7.1%, earlier criticised the deal, saying it is not in the best interest of Samsung C&T shareholders.
"Elliott continues to believe that the proposed takeover is clearly neither fair to nor in the best interests of Samsung C&T's shareholders, and that it is unlawful," the fund said in a statement.
"Elliott has therefore taken the step today of commencing legal proceedings for an injunction against Samsung C&T and its directors in order to seek to prevent the proposed takeover from going ahead and thereby protect the interests of Samsung C&T's shareholders."
The deal is subject to the approval of shareholders in both the companies. They will vote on the proposal on 17 July, and a two-thirds majority is required to approve the deal.
The Lee family owns just 1.4% of Samsung C&T, and the total holding will be less than 20%, if shares of affiliates and related parties are taken into account, according to brokerage CLSA.