Shares in Boto International Holdings, the world's biggest maker of artificial Christmas trees, plunged more than 10 per cent yesterday after the company said it would sell its core business for about HK$1 billion in cash.
Boto will switch its focus to animated computer graphics, a start-up business it entered 18 months ago that has yet to generate revenue. It will rename itself Imagi International Holdings.
Boto's shares initially surged on the news, touching 40 HK cents, before ending at 30.5 cents, down 10.29 per cent.
The company's profitable Christmas tree and leisure furniture business will be sold to a company 70 per cent-owned by the Washington-based Carlyle Group, one of the world's biggest private equity investors.
The other 30 per cent will be held by Boto founder and chairman Michael Kao Cheung-chong and his family trust. The deal will be subject to independent shareholder approval.
A 'substantial part' of the net proceeds would be distributed to shareholders as a special cash dividend, the company said.