June 22 (Bloomberg) -- Lee & Man Paper Manufacturing Ltd. said its controlling shareholder, Gold Best Holdings Ltd., agreed to sell a 12 percent stake to Nippon Paper Group Inc. for HK$3.55 billion ($456 million).
Gold Best will sell Nippon Paper 546 million shares at HK$6.50 each, Lee & Man said in a statement to Hong Kong’s stock exchange today. Nippon and Lee & Man will pursue joint business interests, it said.
Lee & Man, the 10th-best performer this year on the 56-member Bloomberg World Forest Products & Paper Index, fell 3.9 percent to close at HK$6.43 in Hong Kong, after rising to an intraday high of 2.4 percent. The stock has gained 20 percent this year, compared with a 4.8 percent decline in the benchmark Hang Seng Index.
Shares of Nippon Paper declined 1.3 percent to close at 2,587 yen in Tokyo, where it is based. The Japanese papermaker said in a statement its investment in Lee & Man will extend its reach in China and Asia, building on previous deals with Taiwanese, Thai, and Australian rivals.
Lee & Man’s net income for the year ended March 31 rose six-fold to HK$1.83 billion, and sales gained 15 percent to HK$11.09 billion, the company said yesterday. Based in Hong Kong, Lee & Man is the second-largest Chinese maker of linerboard, Nippon Paper said.
Gold Best’s 63 percent stake in Lee & Man will be cut to 51 percent upon completion of the sale to Nippon Paper, the Hong Kong company said.
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