Directors of Anaheim-based electronics maker Multi-Fineline Electronix Inc. have taken steps to nix the acquisition of Singapore’s MFS Technology Ltd. for $500 million, a deal that has caught criticism from investors.
The circuit board maker, known as M-Flex, said a board committee had withdrawn support for the acquisition, which was first announced back in March.
M-Flex makes flexible circuit boards for Motorola Inc. and others. It was looking to buy MFS, a sister company, to expand its production.
But the M-Flex committee now says terms of the offer to buy MFS Technology are “contrary” to the best interests of the company and its stockholders, according to a press release.
Shares of M-Flex jumped on the news.
“In light of recent developments, the acquisition no longer makes financial sense under the existing price and terms,” Chief Executive Phil Harding said.
MFS recently reported sales dropped 8% in the three months ended June 30 versus a year earlier. Gross profits dropped by nearly half.
Both M-Flex and MFS are owned by Singapore’s WBL Corp., which holds about two-thirds of M-Flex.
M-Flex has submitted a proposal to withdraw its offer to buy MFS to the Securities Industry Council in Singapore, a legal requirement that also would suggest the move has the blessing of WBL.
“An announcement will be made in due course once M-Flex receives a response from the” Securities Industry Council, M-Flex said.
The company said it still plans to look for manufacturing capacity beyond its facilities in Anaheim and China, it said.
