Sime Darby cuts E&O stake sale price to reflect property segment outlook
KUALA LUMPUR (Sept 28): Sime Darby Bhd is reducing the disposal price for its 10% stake in Eastern & Oriental Bhd (E&0) by 5.5% to RM323.3 million from RM342.2 million.
Sime Darby president and group chief executive Tan Sri Mohd Bakke Salleh (pictured) said the price reduction better reflects the current outlook of the property sector.
“We are mindful of the challenging business environment where a slowing global economy and the rising cost of living have affected consumer sentiment,” he said in a stock exchange filing yesterday.
“However, both parties are still keen to complete the transaction, leading to a mutually agreed outcome,” he added.
On June 3, the conglomerate announced that it was disposing the 10% stake — comprising 125.98 million E&O shares at RM2.60 each and 48.8 million convertible warrants 2015/2019 in E&O at 30 sen each — to Paramount Spring Sdn Bhd.
In its filing yesterday, Sime Darby said it is lowering the disposal price of the E&O shares to RM2.45 each, but the disposal price of the convertible warrants would remain at 30 sen each.
Paramount Spring is the private investment vehicle of E&O group managing director Datuk Seri Terry Tham Ka Hon. It was reported then that the disposal would result in Tham upping his stake in E&O from 11% to 21%.
Sime Darby shares were down 11 sen (1.4%) yesterday at RM7.67, for a market capitalisation of RM48.5 billion.
This article first appeared in The Edge Financial Daily, on Sept 28, 2016. Subscribe to The Edge Financial Daily here.