KUALA LUMPUR, Aug 29 — Sime Darby has purchased an approximately 30 per cent stake in developer Eastern and Oriental Berhad (E&O) for RM766 million.
The deal works out to be RM2.30 per E&O share or approximately a 20 per cent discount to E&O’s estimated Realisable Net Asset Value (RNAV) of RM3.2 billion.
Sime Darby said in a statement today that it will acquire the stake from Dato’ Tham Ka Hon, the Managing Director of E&O and several other major shareholders of E&O.
The two companies also entered into a three-year collaboration agreement to formalise a broad collaborative framework with regard to their property development businesses.
“The decision to acquire the shares is aligned with the Sime Darby Group’s strategic direction to extend its presence in the property development and hospitality sectors, beyond the Greater KL region, specifically in Penang and Johor,” said Sime Darby.
Sime Darby’s President & Group Chief Executive Datuk Mohd Bakke Salleh said in the statement that Datuk Tham Ka Hon will continue to helm E&O and its management team will remain unchanged.
E&O is involved in the massive Penang Seri Tanjung Pinang development where it is reclaiming 740 acres for the second phase of the project in Tanjung Tokong to develop two islands for mixed development projects, which will have an estimated gross development value (GDV) of RM12 billion.
E&O is expected to reclaim the land in 2012 and the group has until 2019 to complete reclamation before the concession expires.
The group is also involved in several commercial developments in Kuala Lumpur, including the up-market St Mary Residences, Dua Residency, Idamansara and Seventy Damansara projects in the leafy city suburb.
Sime Darby is a diversified conglomerate and is world’s top palm oil planter by landbank size as well as a major property developer.