CHINA SHENGMU plans to make a full acquisition offer for CH MODERN D at a premium of approximately 14.75%

According to the news from Zhitong Finance APP, CHINA SHENGMU (01432) and CH MODERN D (01117) jointly announced that on October 30, 2025, the selling shareholders entered into a share purchase agreement with CH MODERN D Holdings, which conditionally agreed to purchase 107.2 million shares of CHINA SHENGMU held by the relevant selling shareholders (accounting for approximately 1.28% of the total issued share capital of CHINA SHENGMU as of the date of this announcement) for a total cash consideration of HKD 37.52 million. On the same day, CH MODERN D Holdings, Start Great, and Mengniu entered into a voting rights agreement, under which Start Great irrevocably granted CH MODERN D Holdings the authority to exercise the voting rights attached to approximately 2.087 billion shares of CHINA SHENGMU (accounting for approximately 24.90% of the total issued share capital of CHINA SHENGMU as of the date of this announcement). As of the date of this announcement, Start Great holds approximately 29.99% of the total issued share capital of CHINA SHENGMU, and the number of CHINA SHENGMU shares subject to the voting rights agreement was determined after fair negotiation between both parties. As of the date of this announcement, CH MODERN D Holdings and its concert parties own approximately 2.513 billion shares of CHINA SHENGMU, accounting for approximately 29.99% of the total issued share capital of CHINA SHENGMU. Following the completion of any share purchase agreement under any of the share purchase agreements, CH MODERN D Holdings and its concert parties will hold a total of 30% or more of the total issued share capital of CHINA SHENGMU. Therefore, under the restrictions of any share purchase agreement upon completion and at the time of completion of the share purchase agreement, CH MODERN D Holdings will be required to make an offer for all offer shares (i.e., all issued shares of CHINA SHENGMU that CH MODERN D Holdings and Start Great do not yet own or agree to acquire) in accordance with Rule 26.1 of the Takeovers Code. The cash offer for each offer share is HKD 0.35, representing a premium of approximately 14.75% over the closing price of HKD 0.305 per share of CHINA SHENGMU reported on the last trading day on the Stock Exchange. Approximately 5.761 billion shares of CHINA SHENGMU will be subject to the offer, with the maximum consideration payable by CH MODERN D Holdings under the offer being approximately HKD 2.0163 billion. The announcement stated that the combined herd size of CH MODERN D Holdings Group and CHINA SHENGMU Group will exceed 610,000 heads. After the expansion, CH MODERN D Holdings Group will be able to leverage its production advantages to obtain better prices in the procurement of bulk materials such as feed, thereby further achieving economies of scale and reducing unit costs. The acquisition and the offer (assuming it becomes unconditional) will expand the business scale and asset base of CH MODERN D Holdings Group, further consolidating its leading position in the raw milk supply market and enhancing its overall risk resistance capability and market competitiveness