Sime Darby acquire 30 percent stake on Eastern and Orien

On August 28 - Sime Darby's purchase of 30 percent of the stake in Eastern & Oriental. The transaction is completed at Sept 9. And it is claimed that it has violated the take over code. Sime Darby has been paying at around RM 766 million, which is 60 percent more than its market price. Sime Darby bought at RM2.30 per share.

Now , there are several things arising from these issues:

(a) Does this deal benefit two parties - Sime Darby and E & O

(b) It is claimed that E & O has become well known as an established premier property brand, with a niche position in the Malaysian market. Given E& O current blance sheet strength, healty IQ results, premier brand recoginition int marketplace and the maturity of the the management team. With the credit suisee evaluation, it gave E&O Property Development's RNAV as RM 5.25 per share or RM 3.5 billion in market capitalization. And this valuations are excluded their hospitality & lifestyle and property investement division. However, let us think? By having such a good potential, why do the major shareholder, Wan Azmi and GK Goh disposed 11.9 % and 8.6 % respectively. As for the property firm's managing director, Tham, sold 12.2 % stake to Sime Darby? They are able to gain a big money out of the potential profit earned in E & O which has optimistic future.

(c) Does MGO required in this acquistion?

MGO is mendatory general offer. It means that so long the company acquire at least 33 percent of the shares of that company, it can buy the remaining shares of it. So, does Sime Darby violate Take over code. We need to wait for the decision and investigation by Securities Commission.

(d) Does this deal has accounting manipulation?

In conclusion, there are lots of things that we need to investigate and look in depth so that investor can make right decision with the transparency of financial statements.

After disposing their shares, all the existing shareholder will become minority shareholder.