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Hot stock: Chuan Hup shares up 12% following proposed special dividend

SHARES in Chuan Hup Holdings were on a tear in Thursday's early session following a proposed special dividend of nine Singapore cents per share for when the company disposes of its stake in PCI Limited.

The stock advanced four Singapore cents or 11.9 per cent at 37.5 cents on 1.72 million shares as at 10.16am. The quantity traded was higher than the counter's average of 244,000 shares traded over the last 15 trading days.

In January, American private equity firm Platinum Equity Advisor offered to acquire all the shares of mainboard-listed PCI by way of a scheme of arrangement for S$1.33 in cash for each share. Chuan Hup holds 152.7 million shares or a 76.7 per cent stake in PCI.

Shares in PCI, which produces printed circuit board assembly and user interface panels among others, were trading flat at S$1.32.

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Chuan Hup, which operates in the investment, electronics manufacturing services and property segments, said after the market closed on Wednesday that the interim special tax exempt one-tier dividend is still subject to ratification of the disposal by shareholders at an upcoming extraordinary general meeting to be held by May 31, the scheme of arrangement becoming effective, the company being paid for the consideration and approval of the dividend by shareholders.

Platinum Equity Advisors said in January that the acquisition represents an opportunity for it to invest in a differentiated electronic manufacturing services company that has been successful in servicing an attractive, growing portfolio of customers across industrial, automotive logistics, commercial, consumer and lifestyle, and medical end-markets.

The private equity firm added that it has no intention to introduce any major changes to the business of PCI, and plans to delist the company from the Singapore Exchange.