Apex Equity shareholders approve merger again

TheEdge Tue, Nov 19, 2019 09:32am - 4 years View Original


KAJANG: A majority of Apex Equity Holdings Bhd shareholders are determined to merge its stockbroking arm JF Apex Securities Bhd and Mercury Securities Sdn Bhd judging from the outcome of its extraordinary general meeting (EGM) yesterday.

The merger resolution was passed with shareholders and proxies attending the meeting holding 55.32%, or 101.862 million shares, voting in favour. The remaining 44.68%, with 82.259 million shares, voted against it. This is the second time Apex Equity shareholders cast their votes on the proposal to acquire Mercury Securities after an earlier vote was invalidated.

Apex Equity non-executive director Datuk Azizan Abd Rahman urged the dissenting shareholders to stop blocking the proposed merger deal, which has dragged on for a year.

“We hope that there will be no more action from the dissenting shareholders [to block this merger]. We have complied with the court’s requirements. Hopefully, this is the finality,” he told The Edge Financial Daily after the EGM.

Based on the polling results, ACE Investment Bank Ltd and the Chan family are believed to have voted for the merger, whereas Lim Siew Kim — the daughter of the late Tan Sri Lim Goh Tong — and her alleged associates are believed to have voted against the deal.

To recap, a resolution on the merger was tabled at Apex Equity’s first EGM on June 19, with shareholders holding 54.8%, or 100.85 million shares, voting in favour, while the remaining 45.2%, with 83.19 million shares, voted against it. However, the resolution was invalidated by the High Court on Sept 18, following the intervention of Pinerains Sdn Bhd — a minority shareholder of Apex Equity with a 4.17% stake — against a vesting order application by Apex Equity to proceed with the merger.

The decision by High Court Judge Azizul Azmi Adnan was made on the grounds that the circular to shareholders on the proposed merger was opaque.

“We had an option to challenge the court’s decision or to conduct an EGM again. We opted for the second option for the simple reason that we think this would be a quicker way that could save us time and money. If we appeal, it might take a longer time,” Azizan explained.

Now that the shareholders have approved the merger for the second time, Apex Equity needs to proceed to obtain a vesting order from the High Court again.

“If this (the merger) is what the shareholders want, we have to hold on to what they have voted for. At the end of the day, the shareholders have spoken, not once, but twice,” said Azizan.

A vesting order is required in a merger exercise to transfer to — and vest in — one party all of another party’s rights, assets and liabilities.

Asked if the dissenting shareholders would intervene again in the vesting order application, Azizan replied, “I don’t know. I hope they don’t. It is wasting our time and money. By putting up to all this, it is diverting our attention from running the business. In terms of legal fees, they are already costing us about RM2 million.”

Azizan added that if the dissenting shareholders intervene again, the court would have to make a decision on whether or not this should be allowed to continue to drag on.

Meanwhile, Azizan also reiterated that following the death of Apex Equity founder and executive chairman Chan Guan Seng early last year, there has been a leadership vacuum at the group level.

“As far as the board is concerned, we are all non-executive directors. We need that lacuna to be filled. We need a new leader to show us the direction,” he said.

To recap, under the business merger agreement signed last year, Apex Equity will take over Mercury Securities’ stockbroking, corporate advisory and other related businesses for RM140 million, transferring the businesses to JF Apex.

Apex Equity was to pay RM48 million cash and the remaining RM92 million via the issuance of 100 million new Apex Equity shares to Mercury Securities, which is set to emerge as the single largest shareholder of Apex Equity, owning 30.99% equity interest in the merged entity.

Currently, ACE Investment Bank is the single largest shareholder of Apex Equity with a 25.01% stake. The immediate family members of Apex Equity’s late founder Chan have about 16.52% equity interest.

Meanwhile, Siew Kim and her alleged associates — Pinerains, Fun Sheung Development Ltd, Yenson Investments Ltd, Concrete Parade Sdn Bhd, Joymap Bridge Sdn Bhd and Cergas Megah (M) Sdn Bhd — collectively own 40.54%.

Last week, Pinerains made a failed attempt to adjourn the second EGM, as the court had dismissed its notice of application with costs of RM10,000 awarded to Apex Equity.

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