EONCap to table Hong Leong offer to investors
Eon Capital's directors, except for Ng Wing Fai, plan to ask shareholders at an EGM to empower the board to make a final decision on whether or not to accept the deal.
Eon Capital Bhd (EONCap) (5266) has decided to go ahead and table to its shareholders a RM5.06 billion takeover offer from Hong Leong Bank Bhd despite an ongoing lawsuit over the matter.
Its directors, with the exception of Ng Wing Fai who represents the single largest shareholder Primus Pacific Partners, plan to ask shareholders at an extraordinary general meeting (EGM) to empower the board to make a final decision on whether or not to accept the deal.
It said the board would only make the decision if shareholders gave the go-ahead for the deal at the EGM, and after it gets the approval of the Minister of Finance.
More importantly, the board's decision is subject to a final decision by the Kuala Lumpur High Court on the lawsuit filed by Primus last month, it said in a stock exchange filing late yesterday.
"This means, after getting all the approvals, the transaction will only go through if the court deems it lawful," a source familiar with the matter said.
Primus claims the Hong Leong deal is unlawful in the way it is structured and wants EONCap's directors to pay the bank damages of RM1.1 billion if the takeover bid goes through at an EGM.
On Tuesday, it also threatened to start contempt proceedings against the directors should the bank go ahead with the EGM.
But by saying it would wait for the court's decision, EONCap seems to have found a way around potentially being sued for contempt, a banking analyst observed.
However, there are still concerns as to whether Hong Leong will decide to stay on with the deal given that the court matter could drag on.
The case will go to trial only from September 20 whereas Hong Leong has said it may walk away if all approvals for the deal are not secured by August 15.
Hong Leong has yet to indicate if it will extend its offer beyond that date.
Meanwhile, EONCap said that it would convene the EGM in "due course".
A source said it may take one to two weeks before the group is able to issue a circular on the matter to shareholders.
It is possible an EGM may take place in mid- to late August.
Primus is against Hong Leong's offer of RM7.30 a share as this is much lower than its entry cost of RM9.55 a share in 2007. It thinks a fair price should be at least RM8.91.
EONCap's share price closed at RM6.89 yesterday.
By Adeline Paul Raj
Business Times
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