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Hot stock: United Engineers jumps 10% after news of subsidiary disposal
ENGINEERING and property group, United Engineers (UE), surged 8.4 per cent to S$1.94 at 3.50pm on Friday, after its trading halt was lifted.
Some 1.5 million shares were traded, despite the fact that it did not lift its trading halt until after noontime. This was about three times what it traded on Thursday.
At one point, the stock was up 10 per cent at S$1.97.
Earlier, it announced that it was looking to dispose its indirectly-owned subsidiary, Nasdaq-listed MultiFineline Electronix (MFlex), to Shenzhen-listed stamping and sheet metal manufacturer, Suzhou Dongshan Precision Manufacturing.
For the disposal, each stockholder of MFlex will receive US$23.95 per share. This consideration values MFlex's equity at about US$610 million on a fully diluted basis.
Meanwhile, UE will expect to realise an attributable net disposal gain of about S$115.2 million, and receive net proceeds of about S$505.3 million.
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.
On the Nasdaq, after MFlex released the news on Thursday, its stock too jumped 35.2 per cent to S$23.0001.