Indonesian tycoon Salim wins close shareholder vote on controversial US$3b deal

[HONG KONG] Indonesian tycoon Anthoni Salim narrowly won shareholder backing on Friday for a US$3 billion takeover transaction between companies he controls, overcoming criticism about the deal's valuation and questions about corporate governance.

First Pacific, Salim's holding company, said in a filing to the Hong Kong stock exchange that a takeover by its subsidiary Indofood CBP (ICBP) of Pinehill Company was approved by its independent shareholders at a special meeting where 52 per cent of votes were cast in favour.

ICBP is best known for the Indomie noodle brand and Pinehill is one of Indomie's distributors and manufacturers, in the Middle East and Africa.

Mr Salim, Indonesia's sixth-richest man with a net worth of US$5.50 billion according to Forbes, owns 51 per cent of Pinehill and also holds 44.3 per cent of First Pacific's shares, according to corporate filings. ICBP's 2019 annual report says Mr Salim controls First Pacific.

The transaction, which needed a simple majority on Friday to pass, also needs approval of ICBP shareholders to proceed.

Some First Pacific shareholders had earlier raised concerns about the US$3 billion price ICBP was paying for Pinehill, saying it was too high.

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While Mr Salim and his associates were not eligible to vote at Friday's meeting under Hong Kong's related-party rules as they are not considered independent shareholders, they can vote under Indonesian rules in ICBP's extraordinary general meeting (EGM). Some shareholders have said that raised governance questions.

Those in favour of the transaction have said the takeover could boost ICBP's financial performance significantly.

ICBP's EGM, which had been scheduled for July 15, was postponed because Indonesia's financial regulator said it needed to give shareholders additional information, according to announcements in local newspapers.

REUTERS