KUALA LUMPUR: EON Capital Bhd has rejected Hong Leong Bank Bhd’s (HLBB) offer to acquire its entire assets and liabilities for RM4.9 billion as the latter has significantly undervalued the company.“We have taken the time to fully consider Hong Leong’s bid and have chosen to reject it,” said EON Capital chairman Tan Sri Syed Anwar Jamalullail.
He said the decision was in line with the board’s fiduciary duty to secure the best value for all shareholders.
“This undervalued acquisition bid does not account for EON’s significant recent and projected growth, underpinned by the company’s recently completed transformation programme,” he said in a statement yesterday.
EON Capital’s three-year transformation programme, completed last October, had positioned EON for strong and sustained future growth as an independent company.
Earnings have improved in terms of net income, return on assets and return on equity, he said.
Meanwhile, in a filing to Bursa Malaysia earlier, EON Capital said: “After fully consulting its advisers and considering all available information, its board of directors has resolved that the offer was not in the interests of EON Capital and its shareholders based on, amongst others, the purchase consideration in relation to the offer.”
Accordingly, the Board had resolved not to table the offer for consideration and approval by EON Capital’s shareholders, at a general meeting, and not to submit an application to the relevant authorities for approval to accept the offer, it said.
HLBB offered to acquire the entire assets and liabilities of EON Capital for RM4.9 billion cash, or RM7.10 per EON Cap share.
HLBB obtained approval to enter into talks with EON Capital’s two major shareholders, businessman Rin Kei Mei and Sarawak billionaire Tan Sri Tiong Hiew King.
Both owned a combined indirect stake of 31.7 per cent held via Kualapura Sdn Bhd and Lintang Emas Sdn Bhd with 15.4 per cent and RH Development Sdn Bhd with 16.3 per cent.
Khazanah Nasional Bhd, which holds a 10 per cent stake, agreed to sell their stake to HLBB.
The Employees Provident Fund (EPF) was reported to be prepared to sell its 10.7 per cent stake.
Other shareholders of EON Capital included Hong Kong-based private equity fund Primus Pacific Partners which held an equity stake of 20.2 per cent.
EONCap is the holding company of EON Bank which has a network of 140 branches while HLBB is the country’s sixth largest lender with 199 branches and sales centres.
It was earlier reported that the combined assets of HLBB and EON Capital, at RM121.41 billion, would enable the grouping to overtake the assets of the country’s fourth biggest lender RHB Capital Bhd, which stood at RM110.5 billion.
EON Capital share price closed 12 sen higher at RM7.06 yesterday while HLBB’s shares were up five sen at RM8.20. — Bernama