EONCAP one step closer to sale conclusion
Filed Under (Business News) by Webmaster on 07-02-2011
Tagged Under : eon capital
The High Court has ruled that a vote by EON Capital’s shareholders last year in favour of the RM5.06 billion Hong Leong Bank takeover is valid.
Banking group EON Capital Bhd (EONCap) (5266) has managed to clear one of two legal hurdles hampering its takeover by rival Hong Leong Bank Bhd.
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The High Court yesterday ruled that a vote by EONCap shareholders last year in favour of the RM5.06 billion takeover is valid.
EONCap’s biggest shareholder, Primus (M) Sdn Bhd, which is against the takeover, had in October filed a summons with the court, asking that resolutions reached at a September 27 shareholder meeting be declared null and void, citing technicalities.
At that meeting, an estimated 97 per cent of shareholders were present and voting had been in favour of the takeover. Primus did not vote.
Its representative, who had wanted the bank’s chairman to adjourn the meeting since another lawsuit filed by Primus in June was ongoing at the time, had walked out of the meeting ahead of the vote.
Judge Anantham Kasinather, who had presided over the case, ruled that the chairman’s failure to put a motion for adjournment was only a “procedural breach” and that the rights of the members had not been compromised, thus rendering it a valid meeting.
“I decline to make any of the other declaratory orders sought by the plaintiff (Primus),” he said.
With that hurdle out of the way, EONCap is now left with just one other lawsuit to deal with.
Hong Leong’s takeover offer is dependent on the result of the lawsuit.
Primus is suing the bank’s directors for RM1.1 billion, claiming the takeover offer is unlawful in the way it is structured and that the directors have not acted in the best interest of the company.
Primus is against the Hong Leong takeover as the offer price at RM7.30 a share is much lower than its entry price of RM9.55 a share.
Analysts voiced hope that the court case will be concluded soon given that the takeover saga has dragged for over a year now.
“It is encouraging to note that the last court hearing date is still set for March 1 2011, despite additional court hearing dates being announced,” AmResearch said in a note.
