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UE to sell MFlex unit to Suzhou Dongshan at US$23.95 per share

ENGINEERING and property group, United Engineers (UE), on Friday said it is looking to dispose its indirectly-owned subsidiary, Nasdaq-listed MultiFineline Electronix (MFlex), to Shenzhen-listed stamping and sheet metal manufacturer, Suzhou Dongshan Precision Manufacturing.

This will be done by merging a unit of Suzhou Dongshan with MFlex. The outcome will be that MFlex will be the surviving corporation, wholly owned by Suzhou Dongshan.

For the disposal, each stockholder of MFlex will receive US$23.95 per share.

UE's ownership interest in MFlex is complicated, held through several of its subsidiaries.

An agreement and plan of merger has been signed between UE, Suzhou Dongshan, and its subsidiary. The merger is subject to the approval of the shareholders of UE and MFlex.

Currently, Great Eastern Holdings has ordinary and preference shares totalling a stake of about 17 per cent in UE; Oversea-Chinese Banking Corporation has shares representing another 4.3 per cent.

Both parties have provided irrevocable undertakings to vote all of their shares in favour of the merger.

UE said it is supporting the merger because it dovetails with its own plans to streamline the company's businesses across the group. The disposal allows the company to exit from non-strategic or non-core operations of WBL Corporation, a company it acquired in 2013. Net proceeds from the transaction will go towards repaying external borrowings and as general working capital, it added.

Its shares were not trading on Friday as they had been halted before markets opened.