Wednesday June 9, 2010
By ELAINE ANG
elaine@thestar.com.my
HLB takeover more likely with Affin failing to get green light
PETALING JAYA: With Hong Leong Bank Bhd’s (HLB) takeover of EON Capital Bhd (EON Cap) coming closer to fruition, staff at EON Bank group have become increasingly concerned about their job security, sources said.
This has led to EON Bank group chief executive officer Michael Lor sending out an email message yesterday to all employees to allay some of their concerns.
“The main reason for the message is simply because the staff are concerned and asking questions,” a source said.
EON Bank group has close to 6,000 employees and 141 branches.
Lor’s email message is said to have highlighted a few points, starting with the fact that the proposed takeover by HLB of EON Cap was not yet a “done deal.”
Micheal Lor says in his email that the management is concerned about staff welfare
Lor’s email tells employees that all that had transpired so far is that the board of EON Bank had agreed to present HLB’s offer to shareholders.
Lor also said in his email that the management was concerned about staff welfare and that management was also encouraging employees to treat the situation as “business as usual” for the bank.
He also alluded that staff who performed well would be recognised by management, irrespective of ownership of the bank.
A banking analyst said the banking group’s employees had done pretty well based on its first quarter results ended March 31 which saw a 23% increase in net profit to RM97.8mil compared with a year ago.
“It looks like the bank is humming on pretty well,” he said.
Another banking analyst added that based on historical bank mergers in Malaysia, there had not been any widespread job cuts arising soon after any merger.
Following Malayan Banking Bhd’s merger with Pacific Bank Bhd and PhileoAllied Bank Bhd, some 1,230 employees took up the group’s voluntary separation scheme (VSS).
Bumiputra-Commerce Bank Bhd, which was the result of a merger between Bank Bumiputra (M) Bhd and Bank of Commerce Bhd, saw a total of 1,913 employees leaving under the VSS scheme.
On a related matter, it is understood that the circular to shareholders containing HLB’s offer will be dispatched to shareholders sometime this week.
The preparation of the document, especially with regard to EON Cap directors’ recommendation, has been easier to formulate as it is now clear that Affin Holdings Bhd will not be able to go through with its offer to take over EON Cap.
On Monday, Bank Negara turned down Affin’s application to begin negotiations with EON Cap.
It had not given any reason for its decision and declined to elaborate on the matter.
Meanwhile HLB said in a filing to Bursa Malaysia yesterday that it had on June 4 submitted an application to Bank Negara for a time extension for talks with EON Cap as the current approval was until the end of the month.
It also clarified that there was no change to the offer for EON Cap as set out in its offer letter dated April 1.
http://biz.thestar.com.my/news/story.asp?file=/2010/6/9/business/6427787&sec=business
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