EPF may back Hong Leong's EON bid

 

The pension fund, which holds 10.7 per cent of EON Capital, may support the bid if it thinks the price offered is attractive

The Employees Provident Fund (EPF) may back a deal to merge the country's sixth and seventh biggest banking groups if it thinks the price offered is attractive.

The pension fund holds 10.7 per cent of EON Capital Bhd (EONCap), which is being eyed for a takeover by Hong Leong Bank Bhd.

Hong Leong already has the consent of Bank Negara Malaysia to talk to Rin Kei Mei and the Tiong family about buying their shares. Rin and the Tiong family hold about 32 per cent of EONCap.

As Khazanah Nasional Bhd, the state investment arm holding a tenth of EONCap, is said to support the deal, the EPF may also agree.

"If the price is right, we will consider selling," said a source close to the EPF. He declined to be named as he was not authorised to speak to the media.

The EPF also holds a total of 10.86 per cent in Hong Leong as at August 28, according to the bank's latest annual report.

Hong Leong is believed to have informed the board of EONCap about its intention to start formal talks that could lead to the creation of the country's fourth biggest bank.

Hong Leong, now the sixth largest bank by assets, is said to have asked for the regulator's approval to begin discussions with the board of its smaller rival.

Once the central bank gives its nod, the board of EONCap will have to decide if it wants to talk and subsequently present any potential proposal from Hong Leong to shareholders.

Primus Pacific Partners Ltd, one of EONCap's major shareholders seen as the only resistance to the deal, may vote against talking to Hong Leong. Primus is said to have control of EONCap's seven-member board, industry sources said.

Primus is represented on the board by Ng Wing Fai, managing director and founding partner of the Hong Kong-based investment fund. Two independent directors, Hong Kong-based banker Rodney Ward and Malaysian Yeo Kar Peng, were brought onto EONCap's board by Ng and are believed to support Primus.

Also on the board are key shareholders Rin and Tan Sri Tiong Ik King.

EONCap chairman Tan Sri Syed Anwar Jamalullail and another independent director, Datuk Dr Mohd Shahari Ahmad Jabar, are seen as the neutral parties.

The institutional investors of EONCap - Khazanah and the EPF - have no representatives on the board.