online casino bluebook - online casino gambling guide, to top ranked online casinos and reviews of over 200 gambling related websites. www.onlinecasinobluebook.com also host a casino forum, blog, and casino news articles
HLBB, EONCap minorities deserve some enlightenment
Written by Thomas Soon
Friday, 05 February 2010 11:38
Just as when Tan Sri Quek Leng Chan-controlled Hong Leong Bank Bhd’s (HLBB) quest for EON Bank group appears to have ended as abruptly as when it was first proposed, EON Capital Bhd (EONCap) major shareholder and director Rin Kei Mei has revived the possibility of a merger.
As far as Quek was concerned, HLBB’s offer of RM7.10 per share for EONCap’s assets and liabilities had lapsed. There is no question of the RM4.92 billion cash offer being tabled to EONCap shareholders, until and unless HLBB comes back with a new offer.
Given Rin’s decisive move to revive the proposed merger that could have formed the country’s fourth-largest banking group, it would appear an offer, revised or otherwise, may yet again be on the table. This is where HLBB has to enlighten all sides. Some transparency here would not hurt.
EONCap board of directors’ rejection of HLBB’s RM7.10 offer on Tuesday did not come as a surprise as it had earlier said the proposal “significantly undervalued” the EON banking group. The board made the decision after it had asked for an extension of the offer period until Tuesday to deliberate on the matter.
EONCap chairman Tan Sri Syed Anwar Jamalullail reiterated that the “undervalued acquisition bid does not account for EONCap’s significant recent and projected growth, underpinned by the company’s recently completed transformation programme”.
Expressing disappointment over the rejection, HLBB director and Hong Leong Financial Group Bhd president Raymond Choong had said it “was hoping that the EON Capital board would table our offer to shareholders for their decision”. No other information was forthcoming.
Despite both parties’ boards having the approval of Bank Negara Malaysia (BNM) to proceed with negotiations on the proposed takeover and given how it had ended, it would now appear it was a more or less hostile bid from Quek in the first place. According to reports, he is not known to overpay for his acquisitions.
In the latest development, Rin, who holds a 15.4% stake in EONCap, yesterday called for the appointment of eight additional directors to its board. It is unclear if other major shareholders are also keen to see the original offer being pursued.
Again, the only issue is HLBB’s lapsed offer, which means HLBB would have to re-extend its offer, revised or otherwise.
As well documented, EONCap’s major shareholder and Hong Kong-based private equity fund Primus Pacific Partners Ltd, which bought its 20.2% stake at RM9.55 per share, wants a higher price.
HLBB was earlier in talks with “certain shareholders” of EONCap for the potential acquisition of the assets and liabilities, including equity interests, in EONCap.
As it turned out, the “certain shareholders” definitively included Rin Kei Mei and Tan Sri Tiong Hiew King, who own a combined stake of 32.57% in EONCap.
The other major shareholders include Khazanah Nasional Bhd, with a 10% stake and the Employees Provident Fund with 11.91%.
Collectively, the four parties hold 54.48% of EONCap. Their combined decisions will be key to any new developments in the HLBB-EONCap saga. One key pertinent question at this point — is HLBB still in talks with the “certain shareholders”, including Rin? If nothing else, this has to be answered, even from a regulatory point of view.
It would appear that HLBB would not have extended its offer if it hadn’t at least secured the go-ahead of the “certain shareholders”.
The question now — is there still an “understanding” between them and HLBB in the latter’s continuing pursuit, if any, of the EON banking group?
Rin has every right to call for an EGM to seek the appointment of additional directors to EONCap’s board, but had he acted, expressed or implied, with the “understanding” that HLBB will revisit its bid? Are the other major shareholders collaborating with Rin or even HLBB? Minority shareholders do deserve answers to some questions.
This article appeared in The Edge Financial Daily, February 5, 2010.
Saturday February 6, 2010 New EON Cap directors hit a snag in takeover deal? By ELAINE ANG
PETALING JAYA: The appointment of eight new directors to EON Capital Bhd’s (EON Cap) board is still subject to Bank Negara approval and may possibly complicate matters in the EON Cap and Hong Leong Bank Bhd (HLB) takeover deal, industry observers said.
“The central bank’s approval is required and it will take time to audit the proposed eight new members before the EGM,” an industry observer said.
However, an analyst with a local stockbroking firm points out that the process may be sped up as most of the directors proposed are involved, or are directors, in insurance companies and thus will have already been approved by Bank Negara, which needs to approve appointments to insurance companies as well.
“So these individuals have already been through Bank Negara’s vetting process.
“Logically speaking, if they are allowed to be directors in insurance companies, then it ought not to be any different from being a director in a banking institution,” the analyst said.
Major shareholder Rin Kei Mei, who owns 15.5% of EON Cap, had called for an EGM on Feb 22 to appoint the eight new directors to the current board of the financial group.
The eight new proposed directors are Tengku Ahmad Faisal Tengku Ibrahim (ING Insurance Bhd director), Tengku Azman Ibni Sultan Abu Bakar (Syarikat Takaful Malaysia Bhd director), Haron Siraj (Jerneh Asia Bhd and Scomi Group Bhd director), Tan Leh Kiah (commissioner of the Securities Commission), Zaha Rina Zahari (MAA Holdings Bhd director), Wee Hoe Soon @ Gooi Hoe Soon (EON Bank Bhd director), Nicholas John Lough @ Sharif Lough bin Abdullah (MAAKL Mutual Bhd director) and Ahmad Riza bin Basir (Jerneh Asia Bhd and Manulife Holdings Bhd director).
The appointments, if approved at the EGM, will be of immediate effect and will increase the current EON Cap board size to 15 members.
Under section 145 of the Companies Act 1965, shareholders who hold at least 10% of voting rights in the company have the power to convene an EGM to appoint new directors to the board.
The meeting shall be called by notice in writing of not less than 14 days or longer as provided in a company’s articles of association.
The notice of the EON Cap EGM was filed to the stock exchange yesterday, thus providing sufficient notice to shareholders.
On why Rin had requisitioned an EGM for the appointment of the eight directors instead of for HLB’s offer to be tabled to shareholders, a financial adviser said: “If you call an EGM to dispose of assets, you need to prepare a circular that sets out details of the transaction, appoint independent financial advisers for valuation purposes and all of these can only be done with the co-operation of the board. You can’t supplant the board.”
Analysts believe that if the EGM is successful, the new line-up of EON Cap’s directors could reduce Primus Pacific Partners (HK) Ltd’s influence on the board.
OSK is not surprised by the requisition for EGM.
“We continue to believe that the non-strategic shareholders, especially Rin and Tan Sri Tiong Hiew Khing (17.1% stake) remain committed to dispose their respective stakes, even at prices at the lower end of the recently transacted domestic banking merger and acquisition valuation range given their significantly lower entry cost,” it said in a research note.
Analysts believe the deal may be pushed through if Rin is able to convince both Khazanah Nasional Bhd (10% stake) and the Employees Provident Fund (17%) to support HLB’s proposed acquisition.
An analyst with a bank-backed research house noted that any delay in the deal would provide Primus with a chance to source for other bidders for EON Cap.
So far, only property developer Mulpha International Bhd, which wants to expand into financial services, has submitted an application to Bank Negara for permission to start talks with EON Cap.
Approval from the central bank is still pending.
“There is a lot of resistance from Primus to sell to HLB because of the low price. I think Primus will still continue to look for other bidders.
“It may even seek legal recourse if there are any technicalities in the proposed directors appointment and calling for EGM that need to be addressed,” he said.
In the case of Ho Hup Construction Co Bhd, a court order was obtained by Ho Hup’s controlling shareholder to stop its EGM as the notice to remove the majority of the current board of directors and to replace them with six nominees was inadequate.
Saturday February 6, 2010
EON Cap-HLB saga continues
By YVONNE TAN
WITH Rin Kei Mei’s call for an EGM to appoint new directors to the EON Capital Bhd (EON Cap) board, the scene in the EON Cap-Hong Leong Bank Bhd (HLB) saga has changed.
A bigger board tilted towards Rin could entice HLB to make a new offer, observers say. The big question though is – will the new offer be higher than its earlier cash offer of RM4.92bil or RM7.10 per share for all of EON Cap’s assets and liabilities?
“They can certainly afford to come up with a higher offer if they wanted to as they started low,” remarks an analyst.
To recap, the current EON Cap board rejected HLB’s RM4.92bil cash offer to buy its entire assets and liabilities on Tuesday, saying that the offer “undervalued” the company.
It also said that it would not table the offer for consideration and approval by shareholders, therefore lapsing the offer.
EON Cap’s recent transformation programme has placed the group at much higher value than what HLB had offered, the financial group says.
The move by Rin, who has a 15.5% stake in EON Cap, to call for an EGM is seen as the shareholder’s way of sealing a deal with HLB, despite the board’s rejection, as he is a willing seller, having bought EON Cap shares at a relatively low cost price.
Rin’s group will have a majority of directors if the appointments are approved, paving the way for a new offer from HLB, analysts says.
Whether or not the new offer, if it materialises will be a higher offer, it’s anyone’s guess. “The situation is fluid right now, nothing is certain,” says an observer.
Sources have said however that HLB is not prepared to offer a higher price largely due to the fact that there is no one single firm offer for EON Cap other than HLB so far, despite the former indicating that they have been approached by other interested parties.
For now, except for Mulpha International Bhd, which has yet to hear from Bank Negara since it sought its consent to start talks to acquire a stake in the bank, no other suitor has come forth.
In the meantime, what could possibly lead to a delay in the EGM is if the central bank’s approval for the appointment of the eight new directors take longer than expected.
Bank Negara’s approval is required and an audit process would have to be done on the eight members before the proposed EGM.
Having said that, a delay would help Primus Pacific Partners (HK) to buy some valuable time to look for other suitors.
In the interim, other potential bidders could also put in their bids to take over the financial group.
Primus, the single largest shareholder in EON Cap with a 20.2% stake, is largely perceived as the party most opposed to HLB’s earlier offer as it had purchased its shares at RM9.55 per share. In short, it would have lost, on the surface, more than RM300mil if it had accepted HLB’s earlier offer of RM7.10, based on the number of shares it owns.
Rin has a 15.4% stake in EON Cap while the other major shareholders – namely, Tan Sri Tiong Hiew King, has a 17.1% stake, Khazanah Nasional Bhd, a 10% stake and the Employees Provident Fund, a 12% stake.
All are understood to favour the earlier proposal by HLB.
Although HLB’s offer is lower than general expectations, it is believed that the price is still higher than Rin and Tiong groups’ cost of around RM2 per share, and Khazanah and EPF’s cost of below RM6 per share.
At RM4.92bil, HLB’s offer valued EON Cap at 1.4 times price to book value, which falls at the lower spectrum of the valuation range of previous local merger and acquisition deals. Analysts have said that 1.6 times price to book value could be a “fairer price”.
Based on the latest quarterly results where EON Cap’s shareholders funds amounted to RM3.5bil, a valuation of 1.6 times book would translate to about RM8 per share.
Meanwhile, analysts say, any possible fresh offer should provide shareholders with the option of either cash, or shares or a combination of both.
“This way, those who choose to swap their EON Cap shares (with that of the offeror’s) will get a chance to participate in an enlarged banking entity, assuming the offer comes from a banking group,” one analyst says.
Hong Leong Bank unable to consider maintaining EON Cap offer
Written by Joseph Chin
Monday, 08 February 2010 19:52
KUALA LUMPUR: HONG LEONG BANK BHD [] says it is unable to consider a request from EON CAPITAL BHD []'s dissenting shareholders Kualapura (M) Sdn Bhd and Lintang Emas Sdn Bhd to maintain the offer earlier made to EON Cap board.
HL Bank said on Monday, Feb 8 it was unable to consider their request as EON Cap board had rejected the offer and HL Bank had not been informed of any change in the board of EON Cap’s position.
It said that it had received a letter dated Feb 5 from Kualapura and Lintang Emas that they had called for an EGM to be held on Feb 22 for EON Cap shareholders to deliberate on the appointment of eight new directors to EON Cap board.
"In light of the above, Kualapura and Lintang Emas had requested for HL Bank to maintain the offer to EON Cap for a period of 14 days after the date of the EGM," it said.
EON Capital Bhd (5266), Malaysia's seventh-largest banking group, is in no hurry to find a merger partner or be taken over, according to chief executive officer Michael Lor.
The company, which owns EON Bank Bhd, has sufficient capital to expand lending and is poised for growth, Lor said in an interview at the company's headquarters in Kuala Lumpur yesterday.
His comments came after EON's board rejected a RM4.92 billion takeover offer from larger local rival Hong Leong Bank Bhd as too low.
Some EON minority shareholders have since requested a meeting on February 22 to appoint new directors they expect will be more supportive of Hong Leong's overtures.
Hong Leong's offer was equivalent to RM7.10 a share, less than the RM9.55 that Primus Pacific Partners Ltd, its single largest shareholder, paid in 2008.
Hong Leong this week rejected a request from EON's minority shareholders to maintain its offer until after their planned extraordinary meeting later this month, although it has been silent as to whether it might make a new bid.
Mulpha International Bhd, a Malaysian property developer, last month submitted a request to the central bank to start competing talks to buy an EON stake. There has since been no official word as to whether the central bank has approved that request.
EON hasn't started discussions with Mulpha and won't rule
out any other takeover talks, Lor said.
EON Capital has RM44 billion of assets. If it had accepted Hong Leong's offer the
combined entity would have assets of about RM121 billion, making it the fourth-largest bank in the country, overtaking RHB Capital Bhd. Hong Leong is currently Malaysia's sixth-biggest lender. - Bloomberg
Saturday February 20, 2010 New potential bidder for EON Cap fails to get nod
By YAP LENG KUEN
PETALING JAYA: Another potential bidder for a stake in EON Capital Bhd (EON Cap), which recently rejected a RM4.92bil cash offer (or RM7.10 per share) from Hong Leong Bank Bhd, is believed to have failed to obtain Bank Negara’s approval for permission to negotiate.
News of this second application from construction company Teratai Sanjung Holdings (M) Bhd comes close on the heels of an earlier unsuccessful application by property group Mulpha International Bhd to commence talks for the acquisition of a stake in EON Cap.
Teratai Sanjung is understood to have applied for the nod to talk to Kualapura Sdn Bhd and Lintang Emas Sdn Bhd, the private vehicles of major shareholder Rin Kei Mei.
Rin, who owns an indirect 15.4% through the two companies, had been wanting to realise his investments in EON Cap. Following EON Cap’s rejection of the offer from Hong Leong and decision not to table it to the shareholders, he had requisitioned for an EGM (to be held on Monday) to appoint eight new directors to the board.
In its rejection of the application from Teratai Sanjung, Bank Negara had apparently taken into account that the potential acquisition of Rin’s stake could amount to RM600mil to RM700mil and it could be a challenge for the company to come up with that sum of money.
Teratai Sanjung director Rosli Hashim, when contacted, confirmed his company’s interest, pending further word from the authorities.
A company search showed Teratai Sanjung has a paid-up capital of RM2mil, the majority of which is held by Rosli with one remaining share held by Roslan Hashim. Besides Rosli, its other director is Zawiyah Shariff.
A summary of its financial data was not available on the website of the Companies Commission of Malaysia.
Reports indicate that Teratai Sanjung was involved in, among others, the Sungai Pinang beautification project in Penang, the upgrading of the Benta-Jerantut-Maran road as well as development and construction of resort projects such as in Langkawi.
“We are not aware of Teratai Sanjung,” said a source close to Rin, adding that at this point, Rin was not keen to sell his block and exit EON Cap all by himself.
Earlier, Rin and another major shareholder, Tan Sri Tiong Hiew King (who owns 16.3% through RH Development Sdn Bhd) as well as Khazanah Nasional Bhd (10%) had obtained the green light to negotiate for the sale of their stakes in EON Cap.
Unsuccessful applicant Mulpha is also believed to have written to Bank Negara seeking an explanation for the rejection of its proposal to negotiate for the EON Cap stake purchase.
Bank Negara is believed to have conducted a thorough study of Mulpha based on a set of internal guiding principles that are used in assessing the suitability of shareholders in a banking group.
In its reply to a query from Bursa Malaysia last week, Mulpha had said its application to commence negotiations with a substantial shareholder for the acquisition of shares in EON Cap was rejected by Bank Negara and that it was in an ongoing dialogue with the central bank on this matter.
Friday March 12, 2010 Tussle at EON Cap set to heat up again
By DANNY YAP
KUALA LUMPUR: The boardroom tussle at EON Capital Bhd looks set to heat up again with the EGM taking place this Monday after it was adjourned three weeks ago.
Major shareholder Rin Kei Mei had requested the EGM to appoint eight additional directors to the board, which had rejected a RM4.92bil cash offer from Hong Leong Bank Bhd (HLB) and decided not to table it to shareholders. The shareholders’ meeting was originally set on Feb 22 but was adjourned due to technical matters.
Presumably, the new board members, if appointed on Monday, may be the deciding factor on any renewed bid from HLB which is watching the developments closely.
Analysts believe the new directors may likely favour another potential bid by HLB for EON Bank via the takeover of assets and liabilities under the Companies Act, which currently requires HLB to have only 50% stake in EON Cap plus one additional share to be successful.
A local analyst said: “Hong Leong Bank probably wants to wrap up this deal quickly.’’
The analyst said while it was not against the current laws to buy over a company via this method, some shareholders, especially minority shareholders, believed they might be sidelined or marginalised and preferred the potential bid to be subjected to the Malaysian Code on Takeovers and Mergers, which requires the approval of 90% of the shareholders’ votes for it to be successful.
A few major shareholders of EON Cap may be agreeable to the initial takeover offer by HLB as they had purchased their shares at a lower price, but Primus Pacific Partners Ltd, which is EON Cap’s single-largest shareholder with a 20.2% stake, is not so happy.
Going by HLB’s initial offer which works out to be RM7.10 per share, Primus would be receiving a raw deal as it had acquired its shares at a premium of 55% or RM9.55 per share.
The analyst said the merger would be positive as HLB would become the fourth-largest banking group in the country, from its sixth position currently.
“The bank would derive significant synergies and leverage as an enlarged financial institution entity. The merger is in line with the Government’s wish to consolidate the banking industry to be more competitive globally.’’
Another local analyst said some shareholders, including Primus, could be buying time to look for another bidder or for the Securities Commission (SC) to halt the takeover attempt via the Companies Act.
He said in countries like Hong Kong, the Companies Act had been amended to make it more difficult for individuals or corporations to mount a takeover. “They need to secure a 75% stake to effect that.”
The SC had recently said it was reviewing the situation with regards to mergers and acquisitions and would be coming out with further guidelines soon.
Meanwhile, Primus is probably keeping its fingers crossed that the outcome of the much-awaited EGM will be to its favour – somehow
HLBB yet to revive EONCap bid
Written by Isabelle Francis & Joyce Goh
Wednesday, 17 March 2010 12:09
KUALA LUMPUR: Rin Kin Mei, a substantial shareholder of EON Capital Bhd (EONCap), has won shareholders’ support to appoint seven directors but it may be too early for him to declare victory as Hong Leong Bank Bhd (HLBB) has yet to revive its offer to take over the group’s assets and liabilities.
A HLBB official said the banking group was currently reviewing its plan to acquire the assets and liabilities of EONCap.
The official told The Edge Financial Daily that HLBB would reassess the situation following the appointment of seven additional independent directors at EONCap — a move initiated by Rin, who has a 15.4% stake in the banking group.
“Following EON Capital’s EGM on Monday, where the appointment of seven additional independent directors was approved (by shareholders), HLBB is currently reviewing its position and thus will not at present be resubmitting its offer to acquire the entire assets and liabilities of EON Capital,” the official said when contacted.
If HLBB were to resubmit its offer, it would only do so after Bank Negara has approved the appointment of the seven new EONCap directors. This is because a second offer will have a better chance of succeeding with the seven new faces on the board.
It is learnt that EONCap will hold a board meeting as early as this week. The meeting will only be attended by the existing board members, without the new appointees.
Sources told The Edge Financial Daily some directors might tender their resignations at the coming board meeting, in response to the proposed appointment of new directors.
OSK Research noted that the new board line-up, if approved, could be in favour of Rin, as he has eight representatives: six new directors and two from the old line-up versus two representatives from the other major shareholder, Primus Pacific Partners. The other four are independent directors.
OSK opines that if HLBB decides to revive its offer, there is a high probability that the majority of the shareholders would vote in favour as it also believes a new offer would be slightly higher than the original RM7.10 a share.
HLBB had offered to buy the assets and liabilities of EONCap for RM4.92 billion or RM7.10 per share. However, the board rejected the offer for being too low.
It is understood that Primus, which holds a 20.2% stake, was not supportive of the deal because the offer price was much lower than its entry cost of RM9.55 per share.
In an effort to push through the deal, Rin had called for an EGM. At Monday’s meeting, the resolutions to appoint the seven directors were passed.
It is understood that substantial shareholder Khazanah Nasional Bhd, with a 10% stake, voted in favour of the new directors while the Employees Provident Fund abstained from voting.
Sources told The Edge Financial Daily that it would take about two weeks to a month for the central bank to decide if the newly elected are fit for EONCap’s board before they are officially deemed directors.
“The directors are all from financial institutions so they have passed the fit and proper test to be directors of a financial institution. The thing now is, if they are suitable to be on EON Capital’s board,” says a source close to the matter.
The newly appointed directors are Tengku Ahmad Faisal Tengku Ibrahim (ING Insurance’s board), Tengku Azman Ibni Sultan Abu Bakar (Syarikat Takaful Malaysia), Haron Siraj (Jerneh Asia), Zana Rina Zahari (MAA Holdings), Wee Hoe Soon (EON Bank Bhd), Nicholas John Lough (MAAKL Mutual), and Ahmad Riza Basir (Jerneh Asia and Manulife Holdings).
HwangDBS said in a note that once the central bank has determined that the candidates are “fit and proper” to become directors in the banking group, Rin would urge the board to write to HLBB to revive its offer.
All said, an offer by HLBB has yet to be seen. Meanwhile, no one can rule out the possibility that other parties may also compete with Tan Sri Quek Leng Chan for EONCap’s banking assets.
Although no official announcement was made, speculation is rife that other banking groups, including Affin Holdings Bhd and Alliance Financial Group Bhd, are also keen on EON Bank Bhd.
EONCap’s share price inched up one sen to RM6.91 while HLBB gained 12 sen to RM8.70 yesterday.
This article appeared in The Edge Financial Daily, March 17, 2010.
Thursday March 18, 2010 Another HLB offer for EON Cap expected
By ELAINE ANG
Appointment of new directors may pave way
PETALING JAYA: It is anticipated that Hong Leong Bank Bhd (HLB) will make another offer for EON Capital Bhd’s (EON Cap) assets and liabilities after Bank Negara has approved the appointment of the latter’s seven new directors, according to analysts.
An analyst with a bank-backed stockbroking firm believes the potential appointment of the new directors will pave the way for a re-exploration of HLB’s takeover offer or new merger and acquisition (M&A) proposals from other players.
Besides HLB, it is speculated that Affin Holdings Bhd and Alliance Financial Group Bhd may be keen to bid for EON Cap.
“Nonetheless, our take remains that for any credible proposals to be accepted, it is best to assess it from the offeror’s financial strength and potential offer price,” the analyst said.
She noted that there were still hurdles to overcome – primarily getting approval from Bank Negara on the appointment of the directors before moving on to the next stage.
“Secondly, while we believe HLB would not mind re-tabling its proposal, we believe the previous offer price of RM7.10 per EON Cap share will stay,” she said.
“This means little further upside from the current share price level.” An analyst with a local stockbroking firm concurred.
“I believe HLB is open to re-looking into another offer for EON Cap, especially if there are indications that the offer may be accepted at RM7.10 per share.
“HLB would probably have plans to extract value from the merger with EON Cap. It is possible that with the new directors the offer will be accepted. I don’t think HLB will give up so easily,” she said.
However, another analyst with a local stockbroking firm opined that HLB might make a new offer at a slightly higher price.
“I believe HLB will do so as RM7.10 was at a discount to previous M&A transactions. I think they can give a bit more.
“The merger will strengthen HLB’s domestic operations so it will add value to the group. It is worth trying again for HLB,” he said.
A HLB official had said in an earlier statement that following EON Cap’s EGM held on Monday where the appointment of seven additional independent directors was approved, the bank was currently reviewing its position and thus would not at present be re-submitting its offer to acquire the entire assets and liabilities of EON Cap.
EON Cap closed 6 sen higher at RM6.97 with 587,800 shares traded yesterday.
PETALING JAYA: The possible acquisition of EON Capital Bhd (EON Cap) by Hong Leong Bank Bhd (HLB) or other third parties may affect EON Cap’s business focus if dragged on for too long, analysts said.
“I think the deal will be a long drawn out affair. It will be even more complicated if other suitors put in a bid. This may distract the board and management from their business focus.
“All parties should try to get the deal over and done with as fast as possible,” one analyst said.
Besides HLB, it is speculated that Affin Holdings Bhd and Alliance Financial Group Bhd may be keen to bid for EON Cap.
“This makes sense as a merger with EON Cap would enlarge the scale of Affin and Alliance’s domestic business. The small banks are very competitive now and a merger would make them stronger,” she said.
In addition, the analyst pointed out that major shareholder Primus Pacific Partners (HK) Ltd would not take things sitting down.
“We don’t know what Primus has up its sleeve but I believe it will definitely try hard to get alternative offers. It is not good for EON Cap to have this deal hanging over it.
“Moreover, Bank Negara approved EON Cap’s seven new directors pretty fast. I believe the central bank would want closure on this issue soon too,” she said.
Another analyst with a bank-backed research house concurred that EON Cap’s operations might be affected if the merger and acquisition talks dragged on for too long.
“Currently, things are still fine but uncertainty will creep in if the talks take too long. Investor sentiment and staff morale will also be affected. Things have dragged on for almost three months already,” he said.
Nevertheless, the analyst expects the board to elect a new chairman first before reviving any talks with HLB.
It is anticipated that newly appointed independent and non-executive director Wee Hoe Soon @ Gooi Hoe Soon would be the likely candidate, having been the only person who received over 90% of the votes at the recent EGM.
“Everything still hinges on HLB. I believe HLB will come back with a higher price which is closer to RM8. This will be more reasonable and it will enable HLB to maintain its track record of not overpaying for any acquisitions,” he said.
However, an analyst with a local research house does not expect EON Bank’s day-to-day operations to be affected much as it had a team of professional managers to run the business.
“The bank has done well so far with its transformation plan in place,” she said.
She also expects EON Cap’s major shareholder Rin Kei Mei to ask HLB to make a second offer for EON Cap’s assets and liabilities.
EON Cap added 1 sen to close at RM7.02 with 311,700 shares traded yesterday.
“This could open another round of discussions and ultimately a second bid from HLB. This time the new board may table the offer to shareholders to decide,” the analyst said.
EON Cap added 1 sen to close at RM7.02 with 311,700 shares traded yesterday.-ENDS-
