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The bids come as Chinese companies face tightening scrutiny on
their overseas investments. Chinese regulators are reviewing
deal agreements in minute details, and have cracked down on some
large domestic conglomerates, including Fosun, for their
debt-fuelled acquisitions abroad.
Shanghai Fosun Pharmaceutical Group Co Ltd <600196.SS> said in a
stock exchange filing its Hong Kong unit submitted on July 19 a
non-binding bid for a stake in Arbor, which is backed by private
equity firm KKR & Co LP <KKR.N>.
In a separate filing, Shanghai Pharma also said it had submitted
a non-binding bid for a stake in Arbor on the same day.
Both companies did not disclose the quantum of stakes they had
bid for nor the financial terms but said they have not entered
exclusive talks with the seller.
Fosun Pharma said its Hong Kong unit will begin conducting due
diligence to determine further steps.
Arbor has appointed Bank of America Merrill Lynch to run the
sale process, which has attracted around half a dozen
preliminary bids, mostly from Chinese companies and private
equity firms, according to people familiar with matter. The bank
did not immediately respond to a Reuters request for comment.
Some of the bidders may seek to acquire control of the company,
said two of the people, adding that discussions are at an early
stage still.
A potential deal could value Arbor at around $3 billion, two of
the people said.
Bloomberg, which first reported on the sale process, said the
bidders were seeking to buy 20 percent to 30 percent of Arbor.
Arbor did not immediately respond to a Reuters query for
comment. The sources could not be named as the discussions are
confidential.
Atlanta-based Arbor produces mainly branded prescription drugs
for the paediatric, hospital and cardiovascular markets.
New York-based KKR agreed to buy more than a quarter of shares
in the company in December 2014, in a deal that valued privately
held Arbor at over $1 billion, Reuters reported at the time.
(Reporting by Kane Wu; Editing by Muralikumar Anantharaman)
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