Reasons for the rise of E&O still unclear

  • Business
  • Thursday, 19 Jan 2012

PETALING JAYA: Eastern & Oriental Bhd (E&O) share price has been on an uptrend in recent days with dealers still unclear of the reasons why.

E&O has put on some 8% since Monday, finishing flat at RM1.52 at yesterday's close after touching a high of RM1.60. Some 18 million shares changed hands.

One dealer speculated that interest in the stock could be related to the judicial review application by an E&O minority shareholder against the Securities Commission (SC). A minority shareholder of the property developer, Michael Chow Keat Thye, had earlier filed a suit against the SC for not compelling Sime Darby to make a general offer (GO) to acquire all of E&O's shares soon after Sime Darby bought a 30% stake in the company.

In his affidavit, Chow had said that E&O had 20,302 recorded stockholders.

“Except for the three privileged vendors who sold their controlling stake in the company to Sime Darby and managed to reap more than a quarter billion ringgit in premium, the rest of the 20,299 stockholders suffered a collective loss of more than RM678mil,” he was reported to have said in his affidavit.

Sime Darby in August last year announced its plan to buy a 30% stake in E&O for RM766mil from three shareholders, namely Datuk Terry Tham Ka Hon, Tan Sri Wan Azmi Wan Hamzah and Singapore listed GK Goh Holdings.

The price tag valued E&O at RM2.30 per share, which was about 60% premium over the value of the company's shares when the deal was first announced.

Dealers said interest in the stock could also be linked to the property developer's next flagship development - the Medini Integrated Wellness Capital in Iskandar Malaysia which would have a gross development value of RM3bil.

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