(Yicai) Jan. 23 -- Fosun Pharmaceutical Group has abandoned a plan to take private Henlius Biotech for HKD5.4 billion (USD693 million) after minority shareholders quashed the proposal, the Chinese drugmaker told Yicai.

While regretting the failure of the buyout proposal to gain approval, Fosun Pharma fully respects the decision of all Henlius shareholders, a representative said, adding that the Shanghai-based company will go on supporting the unit’s long-term and healthy growth.

Set up by Fosun Pharma and a team of overseas scientists in 2010, Henlius is the company’s biologics platform, developing monoclonal antibody drugs to treat tumors and autoimmune diseases. Fosun Pharma already owns 59.6 percent of Henlius, which went public in Hong Kong in 2019, through three subsidiaries.

Last June, another Fosun Pharma unit offered to take Henlius private in a cash or share swap deal. Fosun New Pharma offered HKD24.60 (USD3.20) per share to the other investors, up to a maximum of HKD5.4 billion.

The offer probably came unstuck because some minority shareholders felt it was too low, despite being a 40 percent premium on Henlius closing share price yesterday, investors told Yicai.

Shares of Henlius [HKG: 2696] lost 8 percent to close at HKD15.74 (USD2.02) each in Hong Kong today, while Fosun Pharma [HKG: 2196] ended the day up 0.9 percent at HKD13.16. Fosun Pharma’s Shanghai-listed stock [SHA: 600196] gave up 0.2 percent to CNY23.66 (USD3.25).

Henlius made an annual net profit of CNY546 million (USD75 million) for the first time in 2023. But its shares have stayed sluggish because of the global economy, the medical industry, the slump in Hong Kong stocks and other factors.  At today’s close, Henlius’ shares are 68 percent down on their initial offering price of HKD49.60 each. 

Hong Kong’s pharmaceutical stocks may start to slowly pick up, according to market insiders. A number of drugmakers have recently said that they plan to go public in the city. For instance, Hengrui Pharmaceutical and Baili Pharmaceutical, both of which are listed in the Chinese mainland, said earlier this month that they had filed for secondary listings in Hong Kong.

Editor: Kim Taylor