EON Cap seeks Bank Negara approval to negotiate with any buyer
Filed Under (Business News) by Webmaster on 20-01-2010
Tagged Under : eon capital, Hong Leong
The board of EON Capital Bhd (EON Cap), the holding company of EON Bank Bhd, has submitted an application to Bank Negara yesterday for permission to start merger and acquisition (M&A) talks with Hong Leong Bank Bhd (HLB).
However, EON Cap is not restricting itself to just negotiation with HLB.
EON Cap told Bursa Malaysia yesterday that it would seek approval for itself and/or any one or more of its subsidiaries to commence negotiations with potential third parties and their related corporations in Malaysia to explore the options.
EON Cap would be exploring several options including the sale of assets and liabilities, acquisition of 5% stake or even merger with a local financial institution.
The first option is for EON Capital directly and/or through any one or more of its subsidiaries undertaking a sale of EON Cap’s assets and liabilities, including (but not limited to) the equity interests in, and/or the assets and liabilities of, EON Bank, EONCap Islamic Bank Bhd and/or MIMB Investment Bank Bhd.
The other option is to acquire at least 5% of the interest in shares in, (ii) merging with, or (iii) undertaking an acquisition of the assets and liabilities of, a licensed financial entity.
EON Bank Group chief executive officer Michael Lor said: “A responsible board or shareholder of any organisation will always seek approval. This is part of the Bafia (Banking and Financial Institutions Act 1989) requirement. However, seeking approval to talk does not mean anything.
“The bank can seek approval to talk to many people. As a responsible board to majority and minority shareholders, the board will seek the necessary approval when it is timely to do so,” he said at the launch of the bank’s deposit campaign “Savers Go Places” yesterday.
This followed a board meeting last Thursday to discuss the invitation from HLB, which had earlier obtained the green light from Bank Negara to talk on an institutional basis.
This confirmed a StarBiz report yesterday which said the EON Cap board would send a letter to the central bank to start M&A talks with HLB.
Meanwhile, Lor said EON Bank aimed to garner RM300mil worth of deposits this year from its new deposit campaign.
He said the bank was targeting a total deposit growth of 20% or about RM6bil this year from a series of deposit campaigns and initiatives.
As at the end of last year, EON Bank had a total deposit balance of close to RM32bil. “We are looking at 14% loans growth for the EON Bank group this year. Last year, we had a loans growth target of 6% to 8% and we are on target (to achieve it),” Lor said.
He said loans growth this year would be driven by its core businesses – retail banking and the small and medium enterprise business.
[...] owner of the seventh biggest among nine local lenders, said it has received Hong Leong’s proposal yesterday to buy its entire assets and [...]