Saturday, August 11, 2012

E&O general offer rumour quashed

POSITION UNCHANGED: SC denies news portal's report after counter surged 28.38pc to close at RM1.90

THE Securities Commission (SC) has initiated a probe into the trading of Eastern & Oriental Holdings Bhd (E&O) and Sime Darby Bhd shares after a news portal reported yesterday that the latter must make a general offer (GO) for E&O shares, which the regulator later denied.

Both counters were among the most active, with E&O surging 28.38 per cent in late trading yesterday to close as top gainer at RM1.90, while Sime Darby shares shed one sen to RM9.80.
Prices of E&O-CA warrant jumped a massive 3,200 per cent to close at 16.5 sen from half a sen.

The SC said in a statement late yesterday it had begun an "examination of the trading associated with the relevant counters arising from the rumour".

The news portal quoting unnamed government sources had reported that the SC had taken a new position on the issue following a review by the the commission under its new chairman, Datuk Ranjit Ajit Singh.

"The SC has reviewed the matter and decided to overturn the earlier decision made when Tan Sri Zarinah Anwar was the chairman," the portal reported.

However, the SC later issued a statement announcing that its position on the GO requirement remained unchanged as per its statement issued on October 11 last year.

"The decision is now subject to judicial review, which is pending in court," the SC said.

On October 11 last year, the SC said a mandatory GO would not be required in the circumstances surrounding Sime Darby's acquisition of a 30 per cent stake in E&O.

The SC had said it had made the decision after having analysed all the evidence gathered and on findings that the share acquisition had not given rise to a mandatory offer obligation under the Malaysian Code on Takeovers and Mergers 2010.

The review by the SC back then had 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.

Bursa Malaysia Securities Bhd also queried E&O yesterday on the unusual market activity, to which the company promptly replied.

"After making due enquiry of our directors and major stockholders, the board of directors of the company wishes to inform that there is no corporate development relating to our group's business and affairs that has not been previously announced that may account for such unusual market activity," it said.

Read more: E&O general offer rumour quashed

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