China Shengmu (1432): Conditional MGO To Launch At Month-End

• Back on the 30th October 2025, China Modern Dairy (1117 HK) (CMD) entered into a conditional SPA to acquire a 1.28% in raw milk producer China Shengmu (1432 HK) (CSM).

• As CMD then held 29.99% in CSM, the additional 1.28% clears 30%, obligating CMD to make a conditional Offer for all shares not held. The Offer Price will be A$0.35/share

• The key SPA condition - SAMR clearance - is now satisfied. SPA completion expected on the 22nd May and Composite Doc dispatch on or before the 29th May.

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

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The Trade:

• Trading at a 9.4% gross spread.

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

• Still, 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.