China Shengmu (01432) surged nearly 6% during the trading session. As of the time of writing, the stock was up 5.8%, trading at HK$0.365, with a turnover of HK$9.7716 million.

On January 19, China Shengmu and Modern Dairy issued a joint announcement stating that CITIC CLSA Securities Limited, acting on behalf of Modern Dairy Holdings, has proposed a possible mandatory conditional cash offer to acquire all of the issued shares of China Shengmu, excluding those already owned or agreed to be acquired by Modern Dairy Holdings and Start Great Holdings Limited.

The offer is contingent upon the completion of a share purchase agreement, which itself is subject to fulfilling relevant preconditions and must be achieved or waived before the final deadline. As of the announcement date, apart from certain conditions specified in the share purchase agreement, the other preconditions had not yet been met or waived.

Modern Dairy Holdings has already obtained approval from its independent shareholders for the related transaction. The announcement emphasized that the offer is merely a possible mandatory conditional cash offer, and both the completion of the share purchase agreement and the making of the offer are uncertain.