China Shengmu (1432): China Modern Dairy Closes In On 50%

• On the 30th October 2025, China Modern Dairy (1117 HK) (CMD) entered into a SPA to acquire 1.28% in China Shengmu (1432 HK), the completion of which triggered a MGO.

• The Composite Doc was dispatched on the 30th June 2026, with a First Close on the 21st July. 31st August is the final close - unless unconditional 14 days beforehand.

• CMD intends to Shengmu’s maintain listing. The Offer is conditional on CMD holding 50%. By my estimate, ~14.4% of shares out have now tendered, lifting CMD’s stake to ~45.66%.

China Shengmu Organic Milk (1432 HK) (CSM) is pretty illiquid. Look away now if this is not your bag.

---

The Trade:

• Trading at a 6.1% gross spread.

• This MGO will get up

• I’d be buying here - either for the arb (if you like illiquid arbs), or for the back-end on the assumption takes control of CSM.

• I don’t have a strong conviction on the back-end.