By Aaditya GovindRao
(Reuters) – Hong Kong shareholders of Shanghai Henlius Biotech on Wednesday rejected Chinese conglomerate Fosun International’s buyout offer, which would have valued the drugmaker at HK$13.37 billion ($1.72 billion).
Fosun unit Shanghai Fosun Pharmaceutical, which already holds a 59.6% stake in Henlius, had offered HK$24.60 per share in June for the remaining stake.
A requisite majority of H-class shareholders did not approve the buyout, the companies said.
“The proposed privatisation of the Company (Henlius) will not proceed and the listing of the H Shares on the Main Board of the Stock Exchange will be maintained,” they added.
The rejection is another blow to Hong Kong drugmakers after an offer from a consortium led by China’s state-owned Sinopharm to buy China Traditional Chinese Medicine (TCM) also fell through in October after failing to get regulatory approvals in time.
David Blennerhassett, content strategist at financial services firm Ballingal Investment Advisors, called Fosun’s failure to buy Henlius “a real shame”.
“In tandem with the TCM fiasco…it sets another bad precedent for future trades,” he said.
The failed deals have rewritten the rulebook for Hong Kong mergers, said Arun George, analyst at Global Equity Research, who publishes on investment insight platform Smartkarma.
“The China TCM deal break taught us that no deal, even a state-owned enterprise-sponsored deal, is safe. The Henlius deal break taught us that it cannot be assumed that the offeror received the blessing of major shareholders before launching the offer,” George said.
Henlius shares closed 4.4% lower on Wednesday, trading at HK$17.1, their lowest level since May 2024. Fosun’s Hong Kong-listed shares fell 1.7%.
($1 = 7.7874 Hong Kong dollars)
(Reporting by Aaditya Govind Rao in Bengaluru; Editing by Savio D’Souza and Anil D’Silva, Kirsten Donovan)
