Diageo plc (LON:DGE) said it has submitted a proposal for a partial tender offer to up its stake in Chinese liquor maker Sichuan Shuijingfang (SJF) to up to 60% from its current stake of 39.71%.
The FTSE 100 drinks company said it had submitted a price of 62 Chinese renminbi (US$9.5) per share, a 25% premium to SJF's closing price of 49.6 renminbi on Monday, although clarified that the proposal did not constitute a formal offer and that there was no certainty that one would be made.
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Shuijingfang, listed in Shanghai, is based in the Chinese city of Chengdu and is a producer of baijiu, one of the top-selling spirits in China, with the original distillery in continuous production for over 600 years.
SJF said that Diageo would pay a maximum of 6.15bn renminbi (US$941.24mln) and that Diageo would fund the deal on its own.
In late-afternoon trading Monday, Diageo shares were down 1.6% at 2,702.5p.