U.S. activist hedge fund Elliott filed another injunction to block a proposed $8 billion merger of two key Samsung Group companies, escalating a conflict over a deal seen key to leadership transfer at South Korea’s top conglomerate.

Elliott said it had filed its second injunction with a South Korean court, this time to stop Samsung C&T Corp from selling treasury shares to KCC Corp in a bid to gain KCC’s support for the proposed all-share takeover offer from Cheil Industries Inc.

The U.S. fund, which last week emerged as the third largest shareholder in Samsung C&T, believes the merger undervalues Samsung C&T and is already challenging the deal in court.

Such investor activism is rare in South Korea and could galvanize more opposition to the deal from smaller shareholders, analysts say.

Both Samsung C&T and Cheil are Samsung Group affiliates and the merger would allow the conglomerate’s controlling Lee family to consolidate its holdings ahead of an eventual power transfer since patriarch Lee Kun-hee, 73, fell ill a year ago. He remains hospitalized.

On Thursday, Samsung C&T said it would sell treasury shares equivalent to a 5.8 percent stake to KCC, which is also a major shareholder in Cheil, to secure its backing for the deal.

Samsung C&T and KCC separately told Reuters they were checking the details of Elliott’s injunction request. The companies declined to comment further.

Samsung C&T shares were down 4.8 percent as of 2122 ET, underperforming a 0.3 percent rise for the broader market.

(Reporting by Se Young Lee; additional reporting by Sohee Kim; Editing by Miral Fahmy)

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