EON Cap withdraws dividend payment plan

Board handed down decision to avoid reduction in $1.6bln offer price to HLB.

EON Capital Bhd has withdrawn a plan to pay a tax-exempt dividend of 10 sen per share for the year ended Dec 31, 2009 to shareholders pending the outcome of a takeover offer from Hong Leong Bank Bhd (HLB).

“The board of directors has resolved to withdraw the proposal to pay the proposed dividend to avoid such payment resulting in a reduction in the offer price,’’ EON Capital said in a statement to Bursa Malaysia on Monday.

In the event the transfer of the entire assets and liabilities of EON Capital to HLB does not materialise for any reason, the board will reconsider the matter of the proposed dividend,’’ it added.

On April 2, EON Capital’s revamped board of directors had resolved to table HLB’s revised RM5.06bil ($1.59 billion) offer at general meeting for shareholders to decide.

HLB’s offer is conditional upon, among others, EON Cap not making any dividend payout or capital distribution from the date of the offer until the date of the completion of the deal.

If EON Cap declares, makes or pays any distribution during such period, then it would be deducted from the offer price.

View the full story in The Star.