China Modern Dairy Holdings Ltd. (Stock Code: 1117) has announced a possible mandatory conditional cash offer for all issued shares of China Shengmu Organic Milk Limited (the Company, Stock Code: 1432) at HK$0.35 per share. CLSA Limited will make the offer on behalf of China Modern Dairy, targeting shares not already owned or agreed to be acquired by the offeror and its concert parties, including Start Great Holdings Limited.

Immediately following completion of certain share purchase agreements (the SPA Completion), China Modern Dairy and parties acting in concert will hold 30% or more of the Company’s total issued shares. Under Rule 26.1 of the Takeovers Code, China Modern Dairy will then be required to proceed with a mandatory general offer for all remaining shares. As of this announcement, the Company has 8,381,295,229 shares in issue and 42,337,500 share awards outstanding.

In compliance with the Takeovers Code, an independent board committee comprising non-executive directors with no direct or indirect interest in the offer has been formed. Additionally, Gram Capital Limited has been appointed as the independent financial adviser to the committee, providing a recommendation on whether the terms of the offer are fair and reasonable.

The announcement cautions that shareholders and potential investors should exercise care when dealing in the Company’s shares. The offer will only be made upon SPA Completion, which remains subject to certain conditions that may or may not be fulfilled. The Company advises those seeking further guidance on the matter to consult professional advisers.