In a statement published on the Stock Exchange of Hong Kong website yesterday, China Modern Dairy moved to reassure shareholders that it had received “no approach from any party in relation to any proposed acquisition of the Company.”
The company, which is the largest milk producer in China, confirmed, however, that “certain preliminary discussions with a third party in connection with a possible disposal of certain assets of the Group” have been in progress.
“However, no material terms concerning the Possible Disposal has been agreed and the Company has not entered into any definitive agreement in relation to the Possible Disposal,” China Modern Dairy added.
Mengniu in talks with “dairy farming business”
In a near-identical statement published earlier today, Mengniu responded to “recent market rumours” surrounding the acquisition of a milk producer.
“The board of directors of China Mengniu Dairy Company Limited notes that there have been recent market rumours that the Company may acquire a company listed on the Stock Exchange of Hong Kong Limited which engages in dairy farming business,” said the statement.
“Having made such enquiry with respect to the Company as is reasonable in the circumstances, the Board confirms that there have been informal talks between the Company and the alleged target company regarding a possible acquisition of certain assets.”
“The Board re-iterates that such talks are very preliminary and the Company has not made any decision regarding the alleged acquisition.”
Third time lucky?
This is the third time since August 2012 that China Modern Dairy and Mengniu have been forced to comment on takeover rumours.
In August 2012, China Modern Dairy denied any knowledge of talks between COFCO Corporation and KKR – the largest shareholders of Mengniu and China Modern Dairy respectively.
In January 2013, reports emerged that discussions regarding the acquisition of China Modern Dairy by Mengniu had begun.
In a statement requested by the Stock Exchange of Hong Kong, China Modern Dairy distanced itself from the reports, while Mengniu flat-out denied that the reports were true.
“Kindly note that the Company and its board did not have any discussion regarding the acquisition or share accumulation of Modern Dairy,” said a statement sent to DairyReporter.com by Mengniu in January 2013.