The operator of Canada's public pension fund plans to vote against the planned merger of two Samsung Group units, sources said Thursday, joining the ranks of investors challenging the conglomerate's latest restructuring move.

The Canada Pension Plan Investment Board, which manages Canada's pension fund, holds around a 0.2 percent stake in Samsung C&T Co. The South Korean firm aims to win approval for its merger plan with Cheil Industries Co., the de facto holding firm of Samsung Group, at the shareholders' meeting slated for July 17.

The proposed merger must win approval from shareholders with two-thirds of the voting rights and a third of outstanding shares.

The construction and trade arm has secured friendly forces with a combined 19.95 percent stake, including the 5.76 percent interest owned by KCC Corp., which it acquired by purchasing treasury shares from Samsung C&T.

But Samsung C&T must secure 47 percent support to have the plan pass at the meeting, given that the attendance rate will likely stand at 70 percent for the upcoming meeting, according to market watchers.

The plan, however, has been challenged by several investors represented by Elliott Associates, which claims that the merger ratio -- 0.35 Cheil share for 1 C&T share -- is disadvantageous for Samsung C&T shareholders. Elliott, led by activist billionaire Paul Singer, has a 7.12 percent stake.

The plan can be scrapped if the opposition group obtains more than 23 percent of friendly shares. Ilsung Pharmaceutical, a local drugmaker with a 2.11 percent stake, earlier signaled it will vote against the plan.

Market analysts are also on Elliott's side. Corporate advisory firm Glass Lewis & Co., Institutional Shareholder Services, and South Korea's Korea Corporate Governance Service also said in respective reports that the merger undermines the interest of Samsung C&T shareholders.

But a local court said in two separate rulings that the proposed merger is reasonable and legitimate, lending voice to Samsung Group, the leading family-controlled conglomerate of South Korea. Elliott is seeking to appeal the two suits, which ask the court to stop the merger and the KCC from exercising its voting rights in the shareholders' meeting.

South Korea's National Pension Service, which holds an 11.21 percent stake in Samsung C&T, has not yet expressed its stance. (Yonhap)