Malaysia's EON Capital is recommending that its shareholders accept the 5.1 billion ringgit ($1.56 billion) takeover offer by Hong Leong Bank.

In a statement, the lender said that a buyout is in the best interest of the company. Transaction advisors MIMB Investment Bank and Credit Suisse had also recommended the move.

"The board will accordingly table the resolution pertaining to the proposed disposal to shareholders for consideration at an extraordinary general meeting," the firm said.

Cash proceeds from the sale, upon approval by regulators, will be distributed among shareholders through capital repayments and special dividends. It can be recalled that Hong Leong had previously offered to pay 4.92 billion ringgit for the firm early this year but was rejected. EON is the seventh largest bank in Malaysia in terms of assets.