SHARES of printed circuit board maker MFS Technology (MFS) recovered yesterday following a weekend announcement that the Singapore Securities Industry Council (SIC) has rejected an unprecedented attempt by Nasdaq-listed Multi Fineline Electronix (M-Flex) to withdraw a general offer for the mainboard-listed company.

After falling as much as 33 per cent to as low as 65 cents last Wednesday on news that M-Flex was rescinding the deal, MFS shares recovered to as high as 90 cents before retreating to end at 82 cents yesterday, 4.5 per cent up on last Friday's close.

About 6.8 million shares changed hands - compared with last Wednesday's meltdown when some 41 million shares were traded. Meanwhile, Anaheim, California-based M-Flex has said it will appeal against the SIC decision.

Singapore mini-conglomerate WBL Corp owns 56 per cent of MFS and has a deemed interest in about 61 per cent of M-Flex, and has provided an irrevocable commitment to both M-Flex and MFS to support the transaction.

WBL has said it will take up equity in M-Flex and will end up owning between 59 and 68 per cent of M-Flex's enlarged capital depending on what proportion of MFS's shareholders opt for either the share or cash offer.

M-Flex's decision to withdraw the offer - in M-Flex shares or their equivalent in cash - followed the recommendation of an independent special committee of M-Flex's board which determined 'that under the current terms, the offer is contrary to the best interests of M-Flex and its unaffiliated stockholders'.

The special committee then urged M-Flex's shareholders to vote against the offer, which would have given MFS shareholders $1.15 to $1.20 for each share they hold or its equivalent in M-Flex shares.

Following the special committee's decision, M-Flex CEO Phil Harding said: 'In light of recent developments, the acquisition no longer makes financial sense under the existing price and terms.'

Under Singapore's takeover code, M-Flex is not allowed to withdraw the offer without the SIC's permission.

'If SIC does not grant such application, M-Flex may be required to convene a stockholders' meeting for the purpose of voting on the offer,' M-Flex said in a statement last Saturday.

'The closing of the offer is conditioned on the approval of M-Flex's stockholders, including those stockholders holding a majority of M-Flex's shares entitled to vote other than shares held by WBL Corporation Limited and its affiliates (that is, a majority of the minority).

'M-Flex intends to continue discussions with SIC with respect to its application to withdraw the offer and will provide a further update once those discussions are resolved.'

The proposed US$500 million transaction, announced in March, would have created the world's second-largest maker of flexible printed circuit boards in revenue terms.