More eyebrows raised over Sime Darby-E&O deal


More questions are being asked about Sime Darby’s takeover of a 30 per cent stake in E&O, which also includes a three-year collaboration agreement.

In particular, is there a need for a mandatory general offer? See the Malaysian Finance blog here.

Others are raising eyebrows over the 60 per cent premium over the market price of E&O shares and the circumstances surrounding the deal, as The Star reports:

In early August, E&O’s shares galloped to a three-year high of RM1.75 on the back of the SP Setia merger rumours, then came down again in line with the global stock slump. Yet, amid the broader market sell-down a few weeks later, its stock again saw aggressive trading, this time from its own shareholders who appeared to be upping their stake.

The notable ones included GK Goh Holdings Ltd, a substantial shareholder of E&O… According to shareholder changes filed with Bursa Malaysia, GK Goh had bought 1.25 million shares in three days, raising its stake to 11.6%…

Sime Darby has defended the deal (See report in The Star):

“The E&O block has been on the market for a while and several parties were still looking at the deal. Sime Darby acted on an opportunity and did so fast,” Sime Darby said in an email response to StarBizWeek.

Sime Darby also said the E&O acquisition did not only bring with it “land bank on Penang island where land is scarce, but also a level of unique talent, branding, and experience and expertise in a niche premium development.”

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