Hong Leong Disappointed With EonCap's Decision

Bernama    February 02, 2010 21:08 PM

KUALA LUMPUR, Feb 2 (Bernama) -- Hong Leong Bank Bhd (HLBB) said it was disappointed that EON Capital Bhd had rejected its offer.

"We are disappointed as we have made a fair and attractive offer.

"We were hoping that the EON Capital board would table our offer to shareholders for their decision," said Hong Leong Financial Group Bhd President and HLBB Director Raymond Choong said in a statement Tuesday.

HLBB's offer on Jan 21 was to acquire the entire assets and liabilities of EON Capital, the holding company of EON Bank Group, at an aggregate purchase consideration of RM4.9 billion to be satisfied fully in cash, that translates to a price of RM7.10 per EON Capital share.

It said that as the EON Capital board of directors had decided not to table the offer for consideration and approval by shareholders nor submit an application to the relevant authorities for approval, the offer lapsed.

In a filing to Bursa Malaysia, EON Capital said that after fully consulting its advisers and considering all available information, its board of directors resolved that the offer was not in the interests of the company and its shareholders based on, among others, the purchase consideration in relation to the offer.

In a separate statement, EON Capital Chairman Tan Sri Syed Anwar Jamalullail said the decision made 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.

EON Capital had earlier sought a Bank Negara approval to commence negotiations with potential third parties but only received the nod for merger talks with HLBB.

According to reports, 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.

On Bursa Malaysia, EON Capital closed 12 sen higher at RM7.06 Tuesday while HLBB was up five sen at RM8.20.