Hong Leong Bank up the offer for EonCap
Filed Under (Business News) by Webmaster on 02-04-2010
Tagged Under : eon capital, Hong Leong Bank
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HONG Leong Bank Bhd has raised its buyout offer to smaller rival EON Capital Bhd (EONCap) to RM7.30 a share, a move deemed unprecedented for its shrewd owner Tan Sri Quek Leng Chan.
Yesterday’s last-minute change came about after EONCap’s new board, led by acting chairman Gooi Hoe Soon, who is among the seven independent directors appointed recently, told Hong Leong that it would reject the proposal if the offer price was not raised before the deadline today.
“EONCap’s board of directors had a meeting on Wednesday and had told Hong Leong that it needed a better price. Otherwise it would reject the offer. The independent directors were firm that they could not present the same offer to shareholders,” a source told Business Times yesterday.
It seemed to be a gamble on the part of EONCap if the plan was to force out a better offer since Hong Leong’s controlling shareholder, Quek, is known to hold tight to his coffers and has almost never relented at the negotiation table in the past.
Still, the board of EONCap will have to decide today if it will table the RM5.06 billion sweetened deal to shareholders.
Like in the previous proposal, Hong Leong has required EONCap to deal with it exclusively on the sale in good faith.
Hong Leong, the country’s sixth largest lender, had on Tuesday revived an earlier proposal to buy out EONCap’s banking assets, sticking to the same price of RM4.92 billion, or RM7.10 a share.
Hong Leong’s previous plan was shot down by EONCap’s board, which said the offer price then significantly undervalued the group.
One of EONCap’s major owner, Rin Kei Mei, who is a keen seller, had since planned a change in the board’s composition so that Hong Leong’s takeover plan could be revived and brought to shareholders for a decision.
EONCap shares closed up 2 sen at RM7.05 yesterday.
