Lumena Falls 28% in Hong Kong as Acquisition Deal Pulled

(Corrects net income figure in fifth paragraph of story published on March 31.)

China Lumena New Materials Corp. (67), which produces the minerals thenardite and glauberite, fell the most in Hong Kong trading since its debut, as the company canceled an acquisition agreement signed last year.

The shares dropped 28 percent, the biggest decline since the June 2009 IPO, making the stock the worst performer in the Hang Seng Composite Index. (HSCI) A total of 265 million shares changed hands, twice the stock’s three-month daily average.

Lumena won’t complete the purchase announced on June 6, the company said in a Hong Kong stock exchange filing yesterday, after the market closed. The termination of the deal doesn’t have “any material adverse impact” on operations, it said, without giving a reason for pulling the purchase.

In June, Lumena said it would pay 320 million yuan ($51 million) for two mining companies in Meishan in southwestern China’s Sichuan province.

Lumena’s full-year net income rose 72 percent to 1.25 billion yuan, according to a separate company filing yesterday after the market closed. That was less than the 1.49 billion yuan average of three analysts’ estimates compiled by Bloomberg.

The maker of thenardite, used in detergents and medical products, said on March 14 it expected to report a “substantial” increase in 2011 profit after completing the acquisition of Sino Polymer New Materials Co.

“The company is unaware of the reasons for the movements in the share price,” Lumena said in a separate e-mailed statement yesterday. “There have been no changes to the company’s management or operation.”

Lumena has slumped 51 percent in the past year, compared with the 12 percent decline in the benchmark Hang Seng Index. The stock closed at HK$1.39 yesterday.

To contact the reporter on this story: Michelle Yun in Hong Kong at myun11@bloomberg.net

To contact the editor responsible for this story: Ryan Woo at rwoo5@bloomberg.net

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