KUALA LUMPUR: EON Capital Bhd was prepared to pay as much as RM12mil in fees to Goldman Sach to find a buyer to acquire the bank for up to 1.5 times its book value, according to independent director Nicholas John Lough.
“The fees were negotiated by the previous board of directors in January,’’ he told the High Court yesterday.
Lough also said that the current board had decided on April 2 to table Hong Leong Bank Bhd’s (HLB) improved offer of RM5.06bil (or RM7.30 a share) made in late March, but had only recommended to shareholders to accept the bid on May 20.
He told the High Court yesterday that this was after the board had spent at least 35 hours in total, deliberating and poring over hundreds of documents between March 31 and May 20, as well as after taking into accounts views from, among others, Goldman Sachs and independent advisers Credit Suisse and MIMB Investment Bank Bhd.
“The board decided that the HLB’s offer was credible and viable,’’ he said.
HLB’s improved offer valued EON Cap at roughly 1.4 times its book value, based on published figures at the time the offer was made.
Lough said the fees negotiated with Goldman Sachs were broken into two parts, comprising a flat US$500,000 to find a buyer and an additional US$3mil as incentive if the buyer was willing to pay at least 1.5 times book value for EON Cap.
The rest of the amount, about RM1.6mil, was set aside “as a buffer” for EON Cap.
Lough said the new board had taken into account the possibility of a selldown in EON Cap’s share price if it had not accepted HLB’s second offer.
This, however, was not the only consideration, he told the High Court.
“The board had decided HLB’s offer was a credible and viable offer. That is why the board decided to bring the offer to shareholders,’’ he said.
Lough said 8,658 shareholders owned 100% of EON Cap. However, some 8,437 shareholder fall under the so-called “moms and pops” category, with a collective 5.15% in the company.
“The majority of the people who attended EON Cap’s recent EGM and AGM were retirees and pensioners,’’ Lough told the High Court when explaining what he meant as “moms and pops” shareholders.
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