EON Capital Bhd, a Malaysian lender, rose to a new two-year high in Kuala Lumpur trading after Hong Leong Bank Bhd said it received approval from the central bank to begin talks to potentially purchase its smaller rival’s assets and liabilities.
The stock rose 2.6 per cent to RM7.03 at 9:14 am Malaysian time, set for its highest close since October 23, 2007.
Hong Leong says Bank Negara has no objection for it to start negotiations with the board of EONCap and EON Bank.
Hong Leong Bank Bhd (5819) has obtained Bank Negara Malaysia’s approval to start takeover talks with smaller rival EON Capital Bhd (EONCap).
The combination of Hong Leong, the country’s sixth biggest bank by asset, and EONCap, ranked seventh among nine local banks, could potentially overtake RHB Capital Bhd as the fourth largest lender.
In an announcement to Bursa Malaysia yesterday, Hong Leong said Bank Negara had no objection for it to start negotiations with the board of EONCap and EON Bank.
Hong Leong already had earlier approval to talk to some EONCap shareholders.
Sources said EONCap had appointed Goldman Sachs as its adviser for the deal, while Hong Leong is advised by CIMB Investment Bank.
Kenanga Investment Bank is said to be advising several EONCap shareholders.
