China Grand, Affiliate Seeking to Buy U.K.'s Sinclair Pharma

(Bloomberg) -- China Grand Enterprises Inc. and its affiliate Huadong Medicine Co. have made an approach to acquire Sinclair Pharma Plc, sending shares of the U.K. company soaring the most in almost eight years.

The companies are in “very early stage” talks, and there's no certainty an offer will be made, Sinclair said in a statement Thursday, confirming a Bloomberg report. The Chinese companies followed with a separate confirmation on Friday, adding that any offer is likely to be made in cash.

Shares of Sinclair, a maker of skin lifting and collagen stimulation treatments, rose 23 percent, the steepest gain since December 2010. The company has a market value of about 113 million pounds ($149 million). Huadong fell as much as 3.3 percent in Shanghai on Friday. China Grand holds about 41.8 percent of Huadong.

The companies are working with financial advisers as they explore a potential deal, people familiar with the matter said, asking not to be identified because the discussions are private.

The talks highlight Chinese firms' interest in overseas health-care targets, following a trend in other sectors from chemicals to infrastructure and technology. China Grand Enterprises's listed health-care business, China Grand Pharmaceutical & Healthcare Holdings Ltd., and private equity fund CDH Investments Fund Management Co. are in talks to acquire Australia's Sirtex Medical Ltd.

Earlier this year, AstraZeneca Plc sold some international sales and licensing rights for its Seroquel schizophrenia treatment to China's Luye Pharma Group Ltd. for $538 million.

--With assistance from James Paton and Daniela Wei.

To contact the reporter on this story: Manuel Baigorri in Hong Kong at mbaigorri@bloomberg.net

To contact the editors responsible for this story: Ben Scent at bscent@bloomberg.net, Amy Thomson, Elizabeth Fournier

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