KUALA LUMPUR, The Associated Press
Hong Kong-based investment firm Primus Pacific Partners Ltd. said Monday that it has filed a lawsuit to stop Malaysia's seventh biggest lender EON Capital from selling out to larger rival Hong Leong Bank.
Primus, which holds a 20 percent stake in EON, said it considered Hong Leong's bid to take over EON as unlawful. It said action by some EON board members to support the bid was not in the interest of the company or its shareholders.
Hong Leong, the sixth-largest bank in Malaysia, offered 4.92 billion ringgit ($1.5 billion) to buy out EON Capital in January but the offer was rejected as too low. Hong Leong later made a new 5.1 billion ringgit ($1.6 billion) offer.
EON Capital have said it will ask shareholders to accept Hong Leong's second offer after appointing new board members.
Primus slammed the appointment of new board members to push through the sale. It said in a statement that the proposed sale was under value and subordinated EON's interests "in favor of certain shareholders wanting to make an exit from the company."
"We have secured a number of legal opinions that come to the conclusion that the manner in which the offer is proposed to be implemented is unlawful," Primus Managing Director Jeroen Nieuwkoop said in the statement.
Officials at EON Capital could not be immediately reached for comments.
Hong Leong's offer of 7.30 ringgit ($2.3) for each EON share is below the 9.55 ringgit ($3) that Primus paid per share for its 20 percent equity.
Primus said the Malaysian High Court has set a July 6 hearing date. It said the lawsuit named a number of respondents, including certain members of EON's board and shareholders but didn't give details. Primus said it wants a swift and final resolution to the case which was of grave importance to investors.
The other key shareholders in EON are local firms RH Development Corp. with a 16 percent stake and Kualapura (M) Sdn. Bhd. with 11 percent, government investment arm Khazanah Nasional has 10 percent equity and the Employees Provident Fund with about 13 percent.