KUALA LUMPUR: EON Bank Bhd's declaration of the RM311.9 million dividend to its parent EON CAPITAL BHD [] (EONCap) on Friday, April 28 has been described as vague by analysts.
AmResearch said EON Cap's announcement 'is vague in the sense that it did not say what it intended to do with the net dividend of RM311.9 million that it would receive from EON Bank'.
'We are not able to get further indications from EONCap at this point,' it said.
EON Bank declared a dividend of RM311.94 million, translating into 44.9 sen per share, payable once it has received the approval from Bank Negara Malaysia. The amount is equivalent to 44.9 sen a share.
EONCap had also said it accepted HONG LEONG BANK BHD []'s offer of RM7.30 per share for the assets and liabilities ' totaling RM5.06 billion -- with no deduction for the payment of the proposed interim dividend.
On Thursday, the High Court dismissed with costs the suit filed by Primus (M) Sdn Bhd against certain shareholders and directors of EONCap over the proposed sale of the latter to HL Bank.
The decision came just ahead of HL Bank's April 30 deadline for securing shareholders' and regulatory approval for its proposed acquisition of EONCap's assets and liabilities for RM5.06 billion.
AmResearch, in its comments, maintained its BUY rating on HL Bank, with an unchanged fair value of RM12.20 a share.
'This is based on unchanged P/BV of 2.3 and calendarised 2011 ROE of 15.7%,' it said.
'The additional possible dividend does not change our valuation for HL Bank post the merger with EONCap, of at least RM14.10 a share. It could potentially reduce EONCap's book value, which means that HL Bank's acquisition P/BV would be 1.4 times instead of 1.3 times,' it said.
AmResearch said this merely raises the P/BV back to the same level when the acquisition was first approved. In addition, it increases the goodwill arising from the acquisition.
This changes the merged entity's capital ratios, with reductions of between 0.3ppt and 0.4ppt. However, the capital ratios are still within acceptable range.
With the approval from the board, the research now expected the takeover to proceed.
The conditions outstanding (notwithstanding appeals from Primus (M) Sdn Bhd) are Bank Negara's approval for the new additional net dividend of RM311.9 million, and the Securities Commission's approval for change in the holder of EONCap investment banking subsidiary's capital market services licence.
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AmResearch said EON Cap's announcement 'is vague in the sense that it did not say what it intended to do with the net dividend of RM311.9 million that it would receive from EON Bank'.
'We are not able to get further indications from EONCap at this point,' it said.
EON Bank declared a dividend of RM311.94 million, translating into 44.9 sen per share, payable once it has received the approval from Bank Negara Malaysia. The amount is equivalent to 44.9 sen a share.
EONCap had also said it accepted HONG LEONG BANK BHD []'s offer of RM7.30 per share for the assets and liabilities ' totaling RM5.06 billion -- with no deduction for the payment of the proposed interim dividend.
On Thursday, the High Court dismissed with costs the suit filed by Primus (M) Sdn Bhd against certain shareholders and directors of EONCap over the proposed sale of the latter to HL Bank.
The decision came just ahead of HL Bank's April 30 deadline for securing shareholders' and regulatory approval for its proposed acquisition of EONCap's assets and liabilities for RM5.06 billion.
AmResearch, in its comments, maintained its BUY rating on HL Bank, with an unchanged fair value of RM12.20 a share.
'This is based on unchanged P/BV of 2.3 and calendarised 2011 ROE of 15.7%,' it said.
'The additional possible dividend does not change our valuation for HL Bank post the merger with EONCap, of at least RM14.10 a share. It could potentially reduce EONCap's book value, which means that HL Bank's acquisition P/BV would be 1.4 times instead of 1.3 times,' it said.
AmResearch said this merely raises the P/BV back to the same level when the acquisition was first approved. In addition, it increases the goodwill arising from the acquisition.
This changes the merged entity's capital ratios, with reductions of between 0.3ppt and 0.4ppt. However, the capital ratios are still within acceptable range.
With the approval from the board, the research now expected the takeover to proceed.
The conditions outstanding (notwithstanding appeals from Primus (M) Sdn Bhd) are Bank Negara's approval for the new additional net dividend of RM311.9 million, and the Securities Commission's approval for change in the holder of EONCap investment banking subsidiary's capital market services licence.
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