Banking group EON Capital today accepted a RM5.1 billion takeover deal from Hong Leong Bank that will create the country's fourth largest lender by assets.

In a filing with the local bourse, EON said the deal, which needs approval from the central bank and Securities Commission, was based on Hong Leong agreeing to an interim net dividend of RM311.9 million to its investors.

It added that Hong Leong would also take over its entire assets and liabilities at the offer price.

EON Capital's statement follows a decision by the High Court on Thursday to reject a suit by private equity firm and major EON shareholder Primus Pacific Partners to declare Hong Leong's planned takeover illegal.

Primus was reportedly unhappy over the value of the transaction and said it would sought RM1.1 billion in damages should the deal go through.

Primus officials could not be reached for comment but lawyers told local media that it would appeal the high court ruling.

The consolidation follows government efforts to liberalise the financial sector, allowing several new banking and insurance licences and easing foreign ownership limits for non-commercial banks.

Malaysia has issued more than 19 licences for commercial banking and six for Islamic banks to foreign operators to date, including to India's Bank of Baroda last year and the Industrial and Commercial Bank of China in November 2009.

- AFP