Speaking to reporters here after meeting party chief V K Sasikala at Parapana Agrahara Prison on her birthday, he said the move was not a "setback" to him.
He said it was unlike the 1989 unification of the party led by late J Jayalalithaa "which was natural".
The AIADMK had split following the demise of founder leader M G Ramachandran in 1987.
The two factions at present are led by Chief Minister K Palaniswami and rebel leader and former Chief Minister O Panneerselvam.
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He said the merger would not last long if it was done to "safeguard their posts, like a business agreement, leaving away cadres, out of selfishness".
Dhinakaran said when the party merged under the leadership of Jayalalithaa in 1989, it was done in the interests of cadres.
However, now the proposed merger move was not in the cadres' interests, he claimed, adding that their interests were now "different".
The prospects of merger of the factions had brightened after the state government yesterday announced a probe by a retired high court judge into the death of Jayalalithaa, over which suspicions were raised by the rebel camp.
To a question related to MLAs supporting him, Dhinakaran said several MLAs had come (to his side) and "more legislators are there like a sleeper cell...I cannot spell out the strategy. If warranted, we will prove our strength."
Dhinakaran said he met Sasikala and held "consultations".
"You will see further moves...Operation," he said adding, his faction would only implement the wishes of party workers.
To a question on the Tamil Nadu government ordering a probe into the death of Jayalalithaa, he said he had demanded it on behalf of Sasikala at the recent Madurai rally against the background of questions raised about her passing away.
On the government's decision to turn into a government- run memorial the late AIADMK supremo's residence here, he said, "There is nothing wrong in making Amma's residence a memorial."
In the same breath, he said if it had been done in sync with the aspirations of the people and cadres, they should have considered if there was any will left behind by Jayalalithaa.
Also, Dhinakaran said the government should have spoken about "legalities," an apparent reference to Jayalalithaa's niece Deepa and nephew Deepak.