Man Shun's (HKG:1746) controlling shareholders signed a letter of intent with a potential buyer to sell their 75% stake, according to a Hong Kong bourse filing on Friday.
The proposed transaction involves 750 million shares held through Prime Pinnacle and, if completed, would trigger a mandatory general offer.
The potential purchaser, Sichuan Wanlexin Technology, has paid a HK$20 million deposit. The parties have entered into a 90-working-day exclusivity period to negotiate a formal agreement.
The company said no definitive agreement has been signed and the proposed transaction may or may not proceed.
Shares of the HVAC, electrical, and mechanical engineering services firm surged over 29% in Monday afternoon trade.