Saturday August 11, 2012
SC: Sime doesn’t need to make MGO
“The SC's position on the MGO requirement in the Sime DarbyE&O share acquisition remains unchanged as per the SC statement issued on Oct 11, 2011. The decision is now subject to judicial review which is pending in court,” it said in a statement.
The statement was in response to an online news portal which reported that the SC would order Sime Darby to make a MGO for E&O shares after buying a 30% stake in the latter last year.
The report, citing Government sources, claimed that the decision to order the MGO was made after a review by the leadership under new SC chairman, Datuk Ranjit Ajit Singh.
Securities of E&O surged in active trade yesterday on the news portal's report, resulting in the company's shares rising 42 sen to close at RM1.90 with 44.74 million shares done, while its call warrants E&O-CA jumped 16 sen to 16.5 sen.
The company was subsequently issued with an unusual market activity (UMA) query by the stock market regulator yesterday.
In its reply to the local bourse, E&O said there was no corporate development that would account for the UMA.
“After making due enquiry of our directors and major stockholders, the board wishes to inform that there is no corporate development relating to the group's business and affairs that has not been previously announced that may account for such unusual market activity.”
In its statement yesterday, the SC added: “There is no change to the decision of Oct 11, 2011 pertaining to the Sime Darby-E&O GO and there is a judicial review which is pending in court.
“The SC has begun an examination of the trading associated with the relevant counters arising from the rumour.”
Meanwhile, in its statement in October 2011, following Sime Darby's acquisition in E&O, the SC said: “In the course of the review (of the circumstances of the acquisition), parties involved in the transaction were interviewed and relevant documents procured.
“The review included an assessment of possible concert party relationships between and among the parties involved. “Precedents in Malaysia and practices and rulings in other jurisdictions on similar issues were also examined.
“Having analysed all the evidence gathered, it is the SC's finding that the acquisition of the 30% equity interest in E&O by Sime Darby had not given rise to a mandatory offer obligation under the Malaysian Code on Take-Overs and Mergers 2010.”
Sime Darby purchased the 30% stake in E&O shares in August last year from three major shareholders managing director Datuk Tham Ka Hon, Singapore-listed GK Goh Holding Ltd and a group led by Tan Sri Wan Azmi Wan Hamzah.
The acquisition represented 273 million shares and 60 million irredeemable convertible secured loan stocks, for RM766mil or RM2.30 a share. The purchase price represented a 60% premium over the value of the shares in the company.
Sime Darby had said then that as per its own valuation, the RM2.30 per E&O share was a 20% discount to E&O's estimated realisable net asset value of RM3.2bil or RM2.88 per share.
Alongside the share sale, a three-year collaboration agreement was sealed between the two companies to cooperate on three areas: sharing knowledge and expertise, leveraging on each other's core competencies, and jointly exploiting economic opportunities.