Malaysian court junks suit blocking EON acquisition

Primus to appeal against court decision that clears way for EON to accept Hong Leong $1.7bn takeover offer.

A Malaysian court on Thursday dismissed a lawsuit to block Hong Leong Bank's $1.7 billion bid for rival EON Capital, local media reports said, clearing the way for a deal which would create the country's fourth largest lender and trigger further consolidation in the sector.

The High Court in northern Penang state dismissed an application by EON Capital shareholder Primus Group to block the sale of the lender to Hong Leong Bank on the ground that the offer undervalued EON, the reports said.

Primus would appeal against the court decision, Ranjit Singh, lawyer for the Hong Kong-based private-equity fund, was quoted as saying by The Edge newspaper.

Pending the appeal, Hong Leong would be able to go ahead with its 5.06 billion ringgit bid for EON's assets and liabilities, a merger that has been nearly one and a half years in the making.

"This means that the ball is now in EON's court whether to accept Hong Leong's offer," said Lim Sue Lin, senior regional analyst at HwangDBS Vickers Research.

The interest of another suitor could yet cloud the deal.

View the full story in Reuters.