E&O: ECM Libra has proposed the nomination of two lawyers (One from ECM Libra & one from TA) to E&O board. E&O has emerged as a substantial shareholder of E&O in recent months. E&O’s AGM will be held on Sept 30, 2011. This is seen by some parties as an attempt to gauge the support of E&O’s minority shareholders, many of whom are not happy with the recent proposal of a 30% stake to Sime Darby by three major shareholders, which did not include ECM Libra.
It is unclear if the move indicates the start of a boardroom battle for the E&O. ECM Libra has been seen as the wild card in this deal and a force to be reckoned with as it emerged as a substantial shareholder at the end of April 2011 with 5.21% equity stake. The stake was upped to 6.3% stake this week held by its investment funds. However, the size of the stake held by ECM Libra Foundation is unknown.
Sime Darby: The SC’s examination on whether Sime Darby is obliged to extend a MGO aggravated the selling pressure amidst global weak equities sentiment. Market observers agree that the price paid could be pricey but this could be due to management’s optimism on E&O and its eagerness to turn around its property division. In the worst case scenario, in which Sime Darby is obliged to make a MGO at rm2.30 per share, the value erosion is estimated at 15 sen per share that is substantially less than the quantum of the fall of the group’s share price.