Thursday September 8, 2011
SC to look at all E&O share transactions in relation to Sime offer
By JEEVA ARULAMPALAM
PETALING JAYA: The Securities Commission (SC) is looking at all transactions involving Eastern & Oriental Bhd (E&O) shares over the relevant period of time in relation to Sime Darby Bhd's recent proposal to buy a 30% stake from three E&O shareholders.
A SC spokesperson told StarBiz yesterday that it reviewed all trading activity surrounding major corporate announcements and in the case of the Sime Darby and E&O deal, SC was examining stock transactions by all parties over the relevant period.
“We are also examining the circumstances surrounding the transaction for any Takoever Code implications. Our course of action will be based on our findings,” SC said in an e-mail response.
Bursa Malaysia filings showed that shareholders and board members of E&O and investment firms had been buying up E&O shares ahead of the deal being announced on Aug 28.
Just before the Hari Raya break, Sime Darby announced it wanted to buy a 30% block (involving 273 million shares and 60 million irredeemable convertible secured loan stocks) in E&O at RM2.30 per share or a total of RM766mil.
The RM2.30 offer price represented a 60% premium to E&O's then market price.
It is interesting to note that GK Goh had been actively buying shares amounting to 1.25 million shares from the open market for three consecutive days starting Aug 10. Other parties buying up E&O shares in August ahead of the deal being announced include ECM Libra Financial Group Bhd which acquired 6.16 million shares, increasing its stake by 0.63% amounting to 6.25% in four transactions in August.
Aside from this, E&O chairman Datuk Azizan Abd Rahman had purchased 100,000 shares on Aug 12 from the open market.
In total, Azizan had purchased some 450,000 shares from the open market involving five separate transactions from April to August this year.
Three of the transactions were done in July and August. Based on Bloomberg data, E&O saw trading volumes increase drastically in July and August, with the company's share price hitting an initial high of RM1.70 ahead of the deal being announced.
E&O's share price had been moving upwards since mid-March (RM1.08 on March 16) and closed at RM1.71 yesterday.
In a response to queries from StarBiz on share purchases ahead of Sime Darby's proposed acquisition, Azizan had this to say: “With regard to the issues raised pertaining to Sime Darby's proposed acquisition of a 30% interest in E&O, I would like to highlight that it is a private transaction between major E&O shareholders and Sime Darby.
"The transaction does not require board approval and hence, was not discussed at the board level. As such, board members were not privy to the transaction and continued to trade in accordance with the prevailing rules and had made appropriate filings with Bursa Malaysia,” Azizan said in an e-mail response.