CHAMPION Technology Holdings, regarded as one of the pure plays on the mainland telecommunications market, plans to acquire British paging manufacturer Multitone Electronics for GBP21.7 million (about HK$247.81 million). Champion said yesterday it would offer 143 pence cash for every share in Multitone, whose directors have recommended shareholders to accept the offer. The offer represents a 9.2 per cent premium to Multitone's closing price of 131 pence yesterday. Multitone, which designs and manufactures specialised radio communications systems, has operations in Britain, Europe and Malaysia and distributes its products primarily throughout Europe. For the year to April 30, it posted pre-tax profits of GBP1.6 million compared with GBP1.9 million in the previous year. Turnover rose to GBP24.6 million from GBP23.2 million. Champion said the purchase of Multitone was driven by its need for high quality paging products to fuel aggressively growth in China. It said Multitone would also provide it with immediate access to the European market. Champion also announced yesterday that its taxed profits for the year to June 30 jumped 74.6 per cent to $139.66 million, from $79.98 million in the previous year. Fully-diluted earnings per share were 23.2 cents. Sales more than doubled to $298.61 million, of which about 91 per cent was generated in China. The company said it would pay a final dividend of six cents a share and was making a bonus one-for-one share issue. Nomura Research International analyst Fred Bowers said the results were slightly below expectations because Champion did not open up as many pager stations in China as he anticipated. However, he said this was due to constraints on management resources rather than the lack of market demand for Champion's high-end communication products. Mr Bowers said the acquisition of Multitone would provide Champion and its stock with a boost by enabling the company to sharply reduce costs by manufacturing its pagers in-house rather than using sub-contractors. ''This transaction could add $70 million in 1995 earnings,'' he said. ''That doesn't include any earnings from Multitone's current or existing market but value added from Champion.'' Mr Bowers said from a passive investment standpoint, Multitone would not appear to be an attractive deal but for a company such as Champion in a position to add value to an under-utilised manufacturing base, it was very favourable. Over the past month, Champion's stock has outperformed the market with a 34.1 per cent jump to $8. Its attraction to investors has allowed the shares to climb as the market goes through a major correction. Last month, Champion signed a strategic alliance with US telecommunications giant Bell Atlantic Corp to bid for the licence to run fix telecommunication network services in Hong Kong. Champion will take about 50 per cent of the proposed venture, estimated to cost about US$100 million. The other members of the consortium include Hughes Network Systems and an unidentified mainland partner. Company chairman Paul Kan Man-lok said the company planned to look at tapping the Indian telecommunications market.