China's Hsu Fu Chi International Ltd , which makes candies and pastries, is in talks with overseas companies, including the world's largest food company, Nestle SA , as global names try to grab a bigger slice of China's growing consumption story.
Hsu Fu Chi, based in Donguan in China's southern Guangdong province, declined to comment further about the talks. Analysts said it would make sense for Nestle to buy a company in an emerging market due to sluggish sales at home.
However, acquisition deals in China are often tough to complete because they are subject to approvals from Chinese authorities, which have rejected deals before. One such rejected deal was Coca Cola's 2009 bid for juice maker China Huiyuan.
"We won't deny they are one of the companies that we've been in touch with, but they are not the only one," Hsu Fu Chi spokeswoman, Christine Sun, said by telephone, referring to Nestle.
"All along, we have had a lot of long-term partners that we've been in touch with," Sun said. She declined to say whether these talks were pertaining to partnerships or acquisitions.
Officials with Nestle could not be immediately reached for comment.
Shares of Hsu Fu Chi, which has a market capitalisation of $2.6 billion, were suspended on Monday. Sun said there was no immediate timeframe as to when trade would resume.
Liquidity of the company's stock has been low with traders saying that its valuation is cheap. Nestle's shares rose 0.1 percent at 0918 GMT, underperforming a 0.4 percent higher STOXX Europe 600 food & beverage index .
Hsu Fu Chi, which makes Chinese snacks such as peanut candies and pop jellies, is about 55 percent held by the Hsu family and 15 percent held by Barings Private Equity.
Hsu Fu Chi, based in Donguan in China's southern Guangdong province, declined to comment further about the talks. Analysts said it would make sense for Nestle to buy a company in an emerging market due to sluggish sales at home.
"We won't deny they are one of the companies that we've been in touch with, but they are not the only one," Hsu Fu Chi spokeswoman, Christine Sun, said by telephone, referring to Nestle.
"All along, we have had a lot of long-term partners that we've been in touch with," Sun said. She declined to say whether these talks were pertaining to partnerships or acquisitions.
Officials with Nestle could not be immediately reached for comment.
Shares of Hsu Fu Chi, which has a market capitalisation of $2.6 billion, were suspended on Monday. Sun said there was no immediate timeframe as to when trade would resume.
Liquidity of the company's stock has been low with traders saying that its valuation is cheap. Nestle's shares rose 0.1 percent at 0918 GMT, underperforming a 0.4 percent higher STOXX Europe 600 food & beverage index .
Hsu Fu Chi, which makes Chinese snacks such as peanut candies and pop jellies, is about 55 percent held by the Hsu family and 15 percent held by Barings Private Equity.
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