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On Thursday, industrial conglomerate Valmont Industries (NYSE: VMI ) announced that it has sold its stake in South African manganese producer Bilston Investments Proprietary Limited. A trio of South African purchasers will buy Valmont's 49% interest in Bilston for a total purchase price of $30 million.
In a statement, Valmont noted that Bilston contributed about $5.1 million to its after-tax profit in 2012, or less than 2.2% of company earnings. Still, this implies the company is getting less than six times earnings for its stake in the company -- a considerable discount to the 17.4-times-earnings valuation its own shares command.
Unsurprisingly, investors are reacting negatively to the news, bidding Valmont shares down 1.4% in Thursday trading, to $152.26.