E&O G O: To be or not to be

Eastern & Oriental Bhd.

The Sime Darby acquisition of Penang-based property development company E&O has a new twist. Some parties are seriously pushing for a general offer (GO) by Sime Darby to the minority share-holders although this is not required by law.

And it is reported that some people with special interest in this deal is buying E&O shares and mopping them up from the open market

Wednesday October 5, 2011

ECM Libra raises stake in E&O to 6.51%

PETALING JAYA: When Eastern & Oriental Bhd (E&O) held its AGM last Friday, one of its bigger shareholders – ECM Libra Financial Group Bhd– also upped its stake to 6.51% from 6.3%.

In a filing with Bursa Malaysia, E&O stated that ECM Libra acquired an additional 2 million shares at RM1 each. A week before that, it had just adjusted its stake from 5.12% to 6.3%.

The impetus for this move is unclear and many are puzzled about it. An analyst suggested that ECM Libra “probably feels left out and this is the only way to preserve the value of its stake.”

He opined that ECM Libra could be looking to force a general offer fromSime Darby Bhd, after the group excluded ECM Libra from its shares buy-over from three other stakeholders.

Aside from that, ECM Libra could also be trying to have more sway through a bigger stake in the company.

ECM Libra first acquired 42.01 million shares, or 5.12% stake, in E&O at the end of April at RM1 per share.

Sime Darby bought a 12.2% stake from E&O managing director Datuk Tham Ka Hon, 11.9% from Singapore-listed GK Goh Holdings Ltd and 9.5% from Tan Sri Wan Azmi Wan Hamzah.

The three stakeholders sold their stakes for RM2.30 per share, or a 60% premium to market.

Tham, who was reappointed as managing director, still holds 5.1% stake and has committed to keep his position in the company for the next three years.

At the AGM last week, chairman Datuk Azizan Abdul Rahman and two other directors – Datuk Henry Chin Poy Wu and Vijeyaratnam V. Thamotharam Pillay – were reappointed.

In contrast, the shareholders rejected the two nominees put forward by ECM Libra, Mahadzir Azizan and Leong Kam Weng.

****************

If Sime Darby had been affected by the pressures and did make a  general offer at the premium price of acquisition, then notorious Dark Lord of Media Kalimullah “Riong Kali” Hassan and ECM Libra would have pocketed about RM 155 million. This is if had Sime Darby paid them a premium similar to what was paid to Tham, Wan Azmi (via Halfmoon Bay Capital Ltd) and Goh.

Ruslan Kassim made a report to the MACC on the meeting which took place in Singapore during Lim Guan Eng’s visit on August 11-12. Unfortunately he got it wrong.  It was never about politics. It was about money. Reliable sources confirmed that the dinner meeting did take place.

Riong Kali wanted Lim to sit down with Mrs Brig. Gen. (NS) Lee Hsien Loong for this deal. He wanted to ask the Singapore authorities to pressure the substantial shareholders to sell the E&O shares to a ‘DAP friendly’ party, which is ECM Libra. Of late ECM Libra has been very active in doing financial and strategic services for the DAP-led Penang government.

It makes sense to have the meeting. Reliable sources say Riong Kali would do his utmost to convince the crown jewel property development of Penang to go to a DAP friendly party instead of the federal government controlled GLC like Sime Darby. The parcels they have in hand plus the 1,000 acres from a reclamation concession is very much Riong Kali’s avenue.

We can recall that during PM ‘Flip-Flop’ Tun Abdullah Ahmad Badawi’s tenure, Riong Kali was already going after something like this in Penang.

The failure to acquire substantial control of E&O never stopped Riong Kali from muscling his way but the two nominees of ECM Libra failed to be appointed. Thank god.

Saturday October 1, 2011

E&O shareholders vote against ECM Libra nominees

By CHOONG EN HAN
han@thestar.com.my

PETALING JAYA: Contrary to expectations, major Eastern & Oriental Bhdshareholder Sime Darby Bhd did not seek board representation at E&O’s AGM while a majority of shareholders voted against the appointment ofECM Libra Financial Group Bhd nominees to the property developer’s board.

“About 75% of the shareholders who attended the meeting voted against (ECM Libra’s) two resolutions,” E&O deputy managing director Eric Chan Kok Leong said after the group’s AGM.

He said the number of shareholders at yesterday’s meeting represented about 65% to 70% of E&O’s total shareholding.

Almost 80% of the shareholders voted for the re-appointment ofchairman Datuk Azizan Abd Rahmanmanaging director Datuk Tham Ka Hon, Vijeyaratnam V. Thamotharam Pillay and Datuk Henry Chin Poy Wu.

The AGM, which was convened at 10am, dragged on till evening as some shareholders sought to get Sime Darby Bhd, which recently bought a 30% stake in E&O, to make a general offer for the rest of E&O shares.

Sime recently emerged as E&O’s single largest shareholder after acquiring the 30% stake from three substantial shareholders managing director Datuk Terry Tham (12.2%), Tan Sri Wan Azmi Wan Hamzah(9.1%) and GK Goh Holdings Ltd (9.5%).

The RM761mil price for the shares was a 60% premium at the market price then.

Tham has retained a 5.1% stake in E&O, while Wan Azmi owns 2.9% and GK Goh, 3.5%. After the sale to Sime, ECM Libra emerged as the second largest shareholder in E&O with a 6.3% stake..

At the time of the stake acquisition, E&O and Sime had signed a separate collaborative agreement, the details of which, Chan said, would be discussed with Sime at a meeting likely to be held this month.

Meanwhile, Chan is bullish on E&O’s long-term aspirations, saying the group would strive to become an internationally respected lifestyle brand.

“We will go ahead with three key strategic moves which involve improving our branding, having strategic alliances and collaboration with renowned partners, and also the development of new growth engines,” he said.

*************

Nevertheless, it is his usual sinister corporate agenda that at least four lawyers were at the AGM as nominees for ECM Libra. They were there to try and seize the moment so that it could be manipulated for Riong Kali’s interest.

The question now is, can Sime Darby resist the pressure of having to make a GO? The trio’s holdings remain at 12% and ECM Libra’s is 6.51%. Let us not forget the various nominees of Nor Mohamed Yackop and friends. All in all, that comes up to about 28-30%, which will burn another RM 770 million in Sime Darby’s coffer.

It is doubtful that they would want to make another cash outright acquisition. The johny-come-lately who would benefit most in this undoubtedly is Riong Kali. ECM Libra would have walked away with a cool RM155 million on an investment which was only 40% of that four months ago.

In the final analysis, Sime Darby share-holders can manage without having control of E&O and probably they have faith in the current BOD and management to give them value for their investments estimated to be realised at RM 3.2 billion. In short, E&O shall remain an associate company of Sime Darby Bhd.

Opportunists should not be allowed to walk away with a ‘corporate molestation’, at the expense of 10.5 million bona fide Bumiputra investors.

*Updated 830pm

Published in: on October 6, 2011 at 16:36  Comments (9)  

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9 CommentsLeave a comment

  1. Nice piece!! Thanks..

  2. […] Read here for full report. […]

  3. BigGuy,

    Sime Darby ni duit org Melayu. Duit org kampung, berdikit dikit utk buat bekalan dihari muka anak anak.

    Hari tu dah rugi RM 1.7B. Ni pergi beli pulak RM 776 juta saham yg nilainya mungkin separuh ja. Pas tu nak mengayakan petualang negara cam Muslim Prisent Hindu God ni ke???

    Jgn sampai org Melayu ajor kerajaan Najib!

  4. Orang2 di Sime Darby ni kerja mcm tak pakai otak … or cud it be the case of ther’s nothing up there in between your 2 ears.. just solid bone..? — forsyth.f

    dari executive sampai ker BOD … sungguh menghampakan.

    yg herannya BOD director masih lagi muka2 lama yg terang2 tak perform dan hnaya memanaskan bontot untuk collect elaun …

    Tak malu ker wei … kalau korang ini ada maruah diri dan ada rasa kebertanggungjawpan … resign aja ler .. saya sebagai seseorang yg ada mempunyai kepetingan secara indirect dlm sime darby, memohon supaya tuan2 BOD semua resign saja lah dari terus menghuru-harakan asset negara dan juga menipu pelabur2.

    Tentang premium sbnyk 60% yg dibayar oleh sime darby (read Bakke), kpd wan azmi, terry tham dan company spork tu, market hari ini masih lagi at RM1.43 per share … so you guys really fucked up big … tak leh harap langsung ..

  5. nak sambung sket lagi ..

    had chan kok leong be with Sime Darby and Bakke with E&O, i am willing to put my top money that sime wud not have paid the RM0.8625 premium per share.

  6. […] E&O G O: To be or not to be […]

  7. […] of Penang based developer E&O. It makes sense to Lim because Riong Kali and ECM Libra is now a ‘DAP friendly financial institution’. It is believed that they both had dinner with Mrs Lee Hsien Loong, who is also Temasek […]

  8. […] Penang, his investment bank ECM Libra is the economic consultant and adviser to many of the deals presided by the DAP Government under Lim. In fact, Riong Kali and ECM Libra […]

  9. […] Penang, his investment bank ECM Libra is the economic consultant and adviser to many of the deals presided by the DAP Government under Lim. In fact, Riong Kali and ECM Libra […]


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