Sime Darby's E&O bid poses policy dilemma

Hantu Laut Sime Darby is short of 3% triggering the takeover threshold.A general offer would cost Sime additional funds of over MR2.0 billion assuming full acceptance by all shareholders. Can the minority shareholders push for a general offer? As it is Sime do not have to make the general offer.The Malaysian Takeover Code is available here. The ball is now at the feet of the SC Chairman. The Securities Commission is now under the watchful eyes of many vested interests. Look like Sime has not learned from past mistakes. Written by M.A. Wind

Friday, 09 September 2011

The plot tickens and all the attention is on the SC. With the Chairman of the SC being married to the Chairman of E&O, who bought shares of E&O just before the takeover by Sime Darby, making things even more intriguing. It is time for SC's next move, and everybody is watching. From The Straits Times, by Leslie Lopez, September 9, 2011: Sime Darby, Malaysia’s financially bruised plantation-based conglomerate is presenting the country’s securities watchdog agency with an awkward policy dilemma with its acquisition of a 30 per cent interest in public listed property concern Eastern & Oriental (E&O) for RM 766 million. Central to the widening public debate is whether the state-controlled group should be compelled to make a mandatory general offer for the remainder of E&O shares, a deal which could cost an additional RM 2.6 billion. E&O is a property concern with lucrative rights to carry out large reclamation works in the northern island of Penang. Critics of the deal argue that Sime Darby’s purchase of the block from three groups, including Singapore’s GK Goh Holdings, was structured in a way to circumvent the country’s takeover code. But proponents of the transaction insist that Sime Darby was merely opting for a more cautious approach to its investment in E&O, and that a general offer could being the offing in the coming months. In any case, the deal is presenting the Securities Commission Malaysia (SC) with a prickly regulatory problem over whether it should force Sime4 Darby to make an immediate general offer in the interest of protecting the rights of minority shareholders.Read more.