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Thursday, November 27, 2014

Eco World proposals ‘fair and reasonable’ says Kenanga


KUALA LUMPUR (Nov 27): Eco World Development Group Bhd (EWD)’s proposed acquisitions and exemption from a mandatory takeover of its shares, have been deemed “fair and reasonable” by Kenanga Investment Bank Bhd.

EWD had proposed to acquire 100% equity interests in Eco Macalister Development Sdn Bhd and Eco World Project Management Sdn Bhd, and the development rights from its select subsidiaries, for RM3.78 billion.

The company has also proposed to exempt Eco World Development Holdings Sdn Bhd from undertaking a mandatory takeover offer for the remaining voting shares in EWD that it does not already own, following the completion of the subscription of new EWD shares.

In the independent advice circular issued yesterday (Nov 26), Kenanga said after taking into account various factors, it is of the opinion the proposals are fair and reasonable, and not detrimental to the interests of the non-interested shareholders of EWD.

“Accordingly, we recommend that the non-interested shareholders of Eco World to vote in favour of the resolutions pertaining to the proposals, to be tabled at the forthcoming extraordinary general meeting (EGM) of the company,” it said.

Kenanga said the proposed acquisitions will allow EWD to expand its landbank by approximately 3,106 acres, while also increasing its gross development value (GDV) by RM30 billion.

Besides that, it said EWD’s pipeline of projects will also increase, with the addition of eight new projects.

EWD closed 4 sen or 0.93% lower at RM4.26, with market capitalisation of RM1.09 billion.

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