Rite Aid Corp.'s plan to merge with Albertsons Cos. in a $24B deal announced in February might be in jeopardy due to shareholder objections that the deal undervalues the pharmacy chain.

One of Rite Aid’s 10 largest shareholders, which declined to be identified, said it planned to vote no on the merger because it does not offer shareholders a fair premium, the Wall Street Journal reports.

Specifically, some investors say they will not receive a large enough share of the company that would be formed by the deal. Also, they say Rite Aid would be better off revamping its stores to be more competitive and remaining a stand-alone entity.

The terms of the deal state that Rite Aid shareholders can exchange 10 shares for a single share of the new company, plus $1.83 per share in cash, or they can trade 10 Rite Aid shares for 1.079 shares in the combined company. In the aggregate, the merger would give Rite Aid investors roughly a third of the new company.

Camp Hill, Pennsylvania-based Rite Aid is currently a relatively small pharmacy chain, with about 2,600 locations, far fewer than Walgreens or CVS, with about 8,100 and 9,800 locations, respectively. (Not counting the more than 1,900 stores Rite Aid recently sold to Walgreens.)

For its part, Boise-based Albertsons has about 2,300 stores. Together, the new entity would boast more than 4,300 pharmacies. That includes those already run by Albertsons.

Shareholders also objected to investing in the grocery sector, claiming that the timing of the deal is unwise as Amazon and discounters like Aldi eat into the sales of more traditional grocers. Real estate broker Barry Endelson, who has a stake in Rite Aid, told the Journal the grocery business is "too difficult."

During a conference call on Thursday, Rite Aid CEO John Standley spoke in favor of the deal.

"It makes sense for us strategically and financially," he said. "The merger will transform Rite Aid by increasing geographic presence, adding new levers for growth and solidifying our financial strength."

The companies project $3.7B in earnings for the new company's first year, along with $375M in annual cost savings by 2022. The Rite Aid shareholder vote on the merger will be in July. Federal regulators have indicated that they will approve the deal if the vote is yes.