Aggressive buying of E&O shares triggers interest

KUALA LUMPUR: A flurry of recent unusual share purchases at Eastern and Oriental Bhd (E&O) amid the market’s sell-off is raising speculation that something could be brewing at the Penang-based property developer.

Talks of corporate developments involving E&O in recent weeks have attracted interest in the stock. Its key asset — the reclamation rights to its Tanjung Pinang development — would give any potential suitor an instant valuable landbank on the island.

Earlier this month, E&O was rumoured to the subject of merger talks with S P Setia Bhd, driving its share price up to a three-year high of RM1.75. However, S P Setia refuted the rumours.

Previously, The Edge reported speculation that several substantial shareholders of E&O, mainly GKG Investment Holding Ltd and Tan Sri Wan Azmi Wan Hamzah’s wife, Puan Sri Nik Anida Nik Manshor, were looking for buyers for their stakes in the company.

Tham is the largest shareholder of E&O 15.7%

The two parties hold less than 12% of the company each, while managing director Datuk Terry Tham Ka Hon is the largest shareholder with 15.7%.

While these speculation eased off as the broader stock market took a major dive, it appears that certain shareholders have been aggressively building up their stakes.

According to shareholding changes filed with Bursa Malaysia, GKG Investment Holdings Pte Ltd bought a total of 1.25 million shares in three days — 300,000 shares on Aug 10;

200,000 shares on Aug 11 and 750,000 shares on Aug 12, upping its stake to 11.6%.

A director of E&O, Datuk Azizan Abd Rahman, acquired 100,000 shares on Aug 12.

Perhaps more interesting is the aggressive purchases made by investment bank ECM Libra Financial Group Bhd, controlled by banker Tan Sri Azman Hashim. Cash-rich ECM is known to be an astute investor and has taken strategic stakes in several companies before, including AirAsia Bhd.

ECM Libra took up a 5.62% equity stake in E&O in late May.

In the past few weeks, it has stepped up its purchases, acquiring a total of 6.16 million E&O shares in the first ten days of August. On Aug 1, ECM Libra acquired 895,000 shares, followed by 813,300 shares on Aug 2; another 3.46 million shares on Aug 9 and most recently, one million shares on Aug 10.

After these purchases, ECM Libra holds 6.25% in E&O. There were no recent transactions by Tham or Nik Anida this month.

Given the poor market sentiment and economic uncertainties, it remains to be seen if those who had been accumulating E&O shares will resume their buying.
And it is also unclear if ECM Libra’s aggressive buying is a prelude to something interesting ahead for E&O.