The transaction between Sime Darby & Three Vendors (E&O managing director and founding member Datuk Tham Ka Hon, Tan Sri Wan Azmi Wan Hamzah and Singapore-listed GK Goh Holdings Ltd) done on 09/09/2011 & 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 RM766 million (RM2.30 - 19 times 2012 forecast earning, 1.85 times price-to-book value, where, by comparison, the property sector has an average of 12 times forecast earnings for 2012 and 0.8 times price-to-book value,” Bushon had said in her column in The Star daily).
1) GK Goh bought shares totalling 1.25 million shares from the open market for three consecutive days starting August 10. Others 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 per cent amounting to 6.25 per cent in four transactions in August.
2) Azizan also purchased 100,000 shares on August 12 from the open market, bringing his total purchase to some 450,000 shares from the open market involving five separate transactions from April to August this year.
Securities Commission (SC) chairman Tan Sri Zarinah Anwar is under pressure to investigate her husband, Datuk Azizan Abdul Rahman (E&O chairman, did not sell to Sime but has been reportedly buying shares in the past few months), for insider trading over conglomerate Sime Darby Bhd’s recent purchase of 30 per cent in property developer Eastern & Oriental Bhd (E&O).There is also pressure on Sime to make a mandatory general offer (MGO – only triggered by 33% or more) to E&O’s minority shareholders as the plantations-to-property group had paid a 60 per cent premium for the 30 per cent stake bought from three shareholders.
The SC has already said it is investigating the deal although it did not note the relationship between Zarinah and Azizan.
In a statement to The Star, Azizan said: “With regard to the issues raised pertaining to Sime Darby’s proposed acquisition of a 30 per cent 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 the e-mail response.
According to Para 6.2 of Pratice Note 9 of Takeover Code 2010, the SC has the right to consider all surrounding circumstance to deem if control has been passed to a new party, thereby mandating the nee party to lunch a GO.
Minority Shareholders Watchdog Group (MSWG) chief executive officer Rita Benoy Bushon had also questioned the deal and asked if there would be an MGO although the share purchase was below the 33 per cent threshold to trigger a mandatory buy.
