Board may meet today to decide on the despatch of circular to shareholders
PETALING JAYA: The board of EON Capital Bhd (EON Cap) could still go ahead with an EGM to table Hong Leong Bank Bhd’s (HLB) RM5.06bil offer to shareholders although the sale is deemed unlawful by EON Cap’s single largest shareholder, analysts said.
It is understood that the board will meet today to decide on whether or not to despatch the circular for the EGM to shareholders.
UOB KayHian, which tracks the development of the proposed buyout, believes chances that EON Cap will go through with the EGM plan and that the proposed offer by HLB will be successful are “reasonably high”.
“Only one shareholder is opposing the buyout. With no other viable option in sight, I think shareholders should go ahead and accept HLB’s offer,” a senior analyst from UOB KayHian told StarBiz yesterday.
Primus Pacific Partners Ltd, which is EON Cap’s largest shareholder with a 20.2% stake, has long been known to be against the decision of the directors of EON Cap to table HLB’s takeover offer to EON Cap shareholders. Primus had bought its stake at RM9.55 per share, which is much lower compared with HLB’s cash offer of RM7.30 per share.
Primus last month filed a legal suit against the directors of EON Cap and three entities controlled by Rin Kei Mei and Tan Sri Tiong Hiew King who are major shareholders in the banking group (and willing sellers) for RM1.11bil in damages as it believed that the price for EON Cap should be much higher than that offered by HLB.
Because HLB plans to take over EON Cap via the assets and liabilities route, it needs only 50% plus one vote for the proposed deal to go through. Rin, Tiong and another major shareholder, Khazanah Nasional Bhd, already have a combined 41.7% stake and have indicated that they are willing sellers — which means that should the other major shareholder of EON Cap — the Employees Provident Fund, with a 13.1% stake, vote for the deal, it will be successful.
Meanwhile at a meeting-in-chambers with the parties’ lawyers yesterday, Judicial Commissioner Varghese George Varughese fixed Aug 17 as the date for the parties to meet again after all the necessary legal papers had been filed.
It is understood that during the session, Primus’ lawyers from legal firm Cheang & Ariff had said that should EON Cap go ahead with the EGM despite the ongoing suit, Primus would initiate contempt proceedings against them. It is also understood that during the meeting, the respondents to the petition, namely the directors being sued together with the three entities controlled by Rin and Tiong, had asked for a one-month extension from yesterday to file and serve their affidavits.
EON Cap in a statement to Bursa Malaysia yesterday said that after the meeting it was determined that:
l. The respondents to the petition are to file and serve their affidavits on or before July 28
·The petitioner (Primus (M) Sdn Bhd - a unit of Primus ) is to file its reply and serve the same on or before Aug 6 and
·The respondents to the petition are to file and serve their affidavits in reply (if any) on Aug 10.
The judge had also fixed the petition for case management on Aug 17 and further fixed the matter for trial on Sept 20 to Sept 23 and Sept 27 and Sept 28, the company said.
HLB has fixed Aug 15 as the deadline for obtaining shareholders’ and other regulatory approvals for the proposed buyout. EON Cap shares closed 6 sen lower at RM6.89 yesterday while HLB ended 2 sen higher at RM8.60.
By YVONNE TAN
yvonne@thestar.com.my
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