EGM for EON Cap
Filed Under (Business News) by Webmaster on 05-02-2010
Tagged Under : eon capital, Hong Leong, Kualapura, Lintang Emas, Rin Kei Mei
Rin Kei Mei, who owns 15.5% of EON Capital Bhd (EON Cap), has called for an EGM to appoint eight new directors to join the current board of the financial group.
This latest development follows EON Cap’s rejection of Hong Leong Bank Bhd’s (HLB) RM4.92bil cash offer for the former’s entire assets and liabilities.
The appointments, if approved at the EGM scheduled for Feb 22 at Hotel Equatorial KL, will be of immediate effect and will increase the current EON Cap board size to 15 members.
“The company wishes to announce that the board of directors has today received a letter dated Feb 4 from Kualapura (M) Sdn Bhd and Lintang Emas Sdn Bhd to notify that they will call and convene an EGM pursuant to section 145 of the Companies Act 1965,” EON Cap told the stock exchange last night.
Both Kualapura and Lintang Emas are Rin’s investment vehicles.
“Rin’s group will have a majority of directors if the appointments are approved, and that will pave the way for any kind of fresh offer from HLB to go through,” an analyst said.
Rin is thought to be one of the more willing sellers of the deal as his entry cost was said to be well below HLB’s offer of RM7.10 per share.
On Tuesday, EON Cap rejected HLB’s RM4.92bil cash offer to buy its entire assets and liabilities, saying that it “undervalued” the company.
It said it would not table the offer for consideration and approval by shareholders, therefore lapsing the offer.
The statement yesterday named the eight proposed directors, namely Tengku Ahmad Faisal Tg Ibrahim, Tengku Azman Ibni Sultan Abu Bakar, Haron Siraj, Tan Leh Kiah, Zaha Rina Zahari, Wee Hoe Soon@Gooi Hoe Soon, Nicholas John Lough@Sharif Lough Abdullah and Ahmad Riza Basir
EONCap’s current seven-member board consists of chairman Tan Sri Syed Anwar Jamalullail, Datuk Dr Mohd Shahari Ahmad Jabar, Rodney Gordon Ward and Yeo Kar Peng.
All four are independent directors.
The other three members are major shareholders of EON Cap – they are Rin, Datuk Seri Tiong Hiew Khing and managing director and founding partner of Hong Kong private equity firm Primus Pacific Partners (Primus) Ng Wing Fai.
Of the major shareholders, Tiong has 17.1% stake, Primus which bought EON Cap shares in 2008 has a 20.2% stake, Khazanah Nasional Bhd 10% and the Employees Provident Fund 12%.
“Primus is believed to exert a significant influence on the board, so this proposed appointment of additional directors is seen as a move to dilute the influence of Primus,” an industry observer said.
Primus, said to be the unwilling seller in the deal, is understandably not interested in the all-cash offer as it had in 2008 bought EON Cap shares at RM9.55 each, which is more than a third above HLB’s offer price of RM7.10 a share.
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 RM8 per share (1.6 times price to book value) could be a “fairer price’’.
Under the Listing Requirements, 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. A company board meanwhile can comprise up to 15 directors.
