China Modern Dairy Holdings Ltd (CH MODERN D) has triggered a mandatory conditional cash offer for all the shares it does not already own in China Shengmu Organic Milk Limited after lifting its stake to 31.26%.
Deal structure • CH MODERN D paid HK$37.52 million for 107.20 million Shengmu shares (1.28%) from three vendors, taking its concert-party holding from 29.99% to 31.26%. • This crossing of the 30% threshold under the Takeovers Code obliges CH MODERN D to launch a general offer at HK$0.35 per Shengmu share. • The offer opens on 30 June 2026, with a first closing date of 21 July 2026 and a final closing date (subject to extension) of 4 August 2026.
Financial terms • Offer price: HK$0.35 per share. • Premiums: 14.75% to the HK$0.305 last close on 30 October 2025; 11.11% to the 5-day average; 8.19% to the 10-day average; 7.75% to the 30-day average. • Discounts: 26.22% to audited NAV per share of HK$0.47 (31 Dec 2025) and 29.33% to adjusted NAV per share of HK$0.50 (31 Mar 2026). • Shares under offer: 5.76 billion (68.74% of issued capital). • Maximum cash outlay: HK$2.02 billion, funded entirely from internal resources. • Implied equity value for Shengmu: HK$2.93 billion.
Conditions and settlement • The offer is conditional on CH MODERN D and its concert parties securing >50% of Shengmu’s voting rights. • Payment will be dispatched within seven business days after the offer becomes unconditional.
Intentions post-completion • CH MODERN D plans to keep Shengmu’s listing status and maintain existing operations but will review structure and management post-offer. • It intends to nominate at least three new directors to the Shengmu board while retaining one Mengniu-designated director, in line with a voting rights agreement covering 2.09 billion Shengmu shares (24.90%) held by Mengniu subsidiary Start Great.
Target overview • Shengmu generated 2025 revenue of RMB3.01 billion and posted a net loss of RMB373 million. • Audited net assets attributable to owners stood at RMB3.59 billion (approximately HK$4.0 billion) at 31 December 2025. • Independent valuer Jones Lang LaSalle appraised Shengmu’s identifiable net assets at RMB3.67 billion as of 31 March 2026.
Advisers • CITIC Securities (Hong Kong) is exclusive financial adviser to CH MODERN D; CLSA Limited is making the offer on its behalf. • Gram Capital advises Shengmu’s independent board committee; Ernst & Young is reporting accountant.
Offer timetable highlights • Offer opens: 30 Jun 2026 • First closing/date for acceptances: 21 Jul 2026 (4:00 p.m.) • Results announcement: 21 Jul 2026 (by 7:00 p.m.) • Final closing (if unconditional on first closing): 4 Aug 2026
CH MODERN D states it has no present intention to exercise compulsory acquisition rights even if its holding exceeds 90%, and undertakes to restore Shengmu’s public float should it fall below Listing Rules requirements.