Elliott’s defiance has come at a bad time for Samsung. Lee and his siblings, who control Cheil, need C&T to solidify their grip on their business empire because C&T owns about $11 billion of group company shares, including those of Samsung Electronics.

Because the deal needs the approval of at least two-thirds of votes at the extraordinary general meeting on July 17, both sides are lobbying other shareholders to join their campaigns. Elliott, through an external public relations agency, declined to comment.

Past Campaign

Unlike past proxy contests in Korea involving foreign investors -- think billionaire brothers Richard and Christopher Chandler, activist Carl Icahn and Warren Lichtenstein of the hedge fund Steel Partners -- the outsiders are getting some local support. For example, in an Internet cafe on Naver Corp.’s website, over 600 minority investors holding more than 800,000 shares combined in C&T as of Thursday agreed to delegate their voting rights to Elliott to block the merger.

“Public awareness has gone up and Koreans have become more lenient about foreign investors,” said Chae Yi Bai, an analyst at Center for Good Corporate Governance. “People don’t immediately label them as thieves.”

Elliott also has gotten an ally in APG Groep NV, manager of the world’s second-largest pension fund, which said it plans to vote against the merger.

Samsung’s not without its share of friends. KCC Corp., historically a Samsung ally, said Wednesday it will buy Samsung C&T’s treasury shares, equivalent to a 5.8 percent stake, ahead of the shareholders’ meeting. The Lee family and other Samsung units own about 13.9 percent of C&T, according to regulatory filings.

Swing Vote

A notable investor that’s kept mum is C&T’s single biggest one: South Korea’s 482-trillion-won National Pension Service, a fund overseen by the nation’s health ministry. While NPS has declined to comment on how it will vote, the fund has sided with management 91 percent of the time last year. In previous years, it helped companies such as KT&G Corp. and SK Group thwart challenges to management.

Behind the sporadic challenges to the chaebol are concerns about founding families making unfettered decisions at the expense of other shareholders.