EON Capital rejects HLB offer

“The offer is not in the interests of EON Capital and its shareholders based on, among other things, the purchase consideration,” the company said in a statement to the Kuala Lumpur stock exchange.

Primus Pacific owns 20.2% of the country’s seventh-largest banking group, a stake it picked up for 9.55 ringgit ($2.79) per share. HLB’s offer amounted to 7.10 ringgit ($2.07) per share. “This undervalued acquisition bid does not account for EON’s significant recent projected growth,” EON Chairman Syed Anwar Jamalullail was quoted as saying.

Primus has bought itself some time to court other offers, although at the moment it is understood HLB is the only potential buyer in the mix. Mulpha International, a Malaysian property developer, has been reported to have requested permission to begin talks, but there has been no formal expression of interest.

The situation becomes more complicated with a February 22 EGM planned after the Chinese New Year, which could change the dynamics of the board. Up to eight new directors are expected to be appointed in a move to water down Primus’ influence.

EON is in between a rock and a hard place after Malaysia’s central bank, Bank Negara, rejected EON Capital’s proposal to issue 58.7 million new warrants in an attempt to raise capital. Some analysts believed at the time that the central bank wanted a stronger showing of Primus’ commitment to the group through a subscription to warrants and bonds.

EON and Primus appear to be at odds about the strategy. While both would like a higher offer price, EON does not seem to be in any rush to sell, while Primus would, it seems, happily exit. With the new board shift likely to come on the 22nd, relations between the two could be further strained, making any positive outcome difficult to achieve.

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• Topics
• Southeast Asia
• Exits
• Financials
• Primus Pacific Partners