By Jonathan Cheng

SEOUL--U.S. hedge fund Elliott Associates LP said Friday that it would appeal a South Korean court ruling that gave its blessing to a shareholder vote on a proposed merger of two Samsung Group affiliate companies.

On Wednesday, South Korea's Central District Court rejected a motion brought by Elliott to block the shareholder vote, slated for July 17, to approve a merger between Samsung's de facto holding company, Cheil Industries Inc. (028260.SE), and its construction and trading arm, Samsung C&T Corp. (000830.SE).

Elliott, which holds a 7.1% stake in Samsung C&T, argues that the deal unfairly values Samsung C&T, which holds a 4.1% stake in the Samsung conglomerate's crown jewel, Samsung Electronics Co. (005930.SE).

In its Wednesday ruling, the court agreed with Samsung that the merger proposal was done in accordance with South Korean law.

Write to Jonathan Cheng at jonathan.cheng@wsj.com

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