The board of Chinese infant formula manufacturer Feihe International has received a letter of interest from its chairman and CEO for a proposed purchase of the firm.

In an announcement today (4 October), Feihe said its board of directors has received a preliminary, non-binding proposal letter from You-Bin Leng, to acquire all of the outstanding shares of common stock of the company he does not currently own for US$7.40 per share.

According to the letter, an acquisition vehicle will be formed for the purpose of completing the deal, with the purchase intended to be financed through a combination of debt and equity capital.

Mr. Leng currently owns 45.34% of the company’s common stock.

The letter states that MSPEA has received a “highly confident” letter from Wing Lung Bank with respect to $50m in debt financing.

The board said “no decisions” have been made by the special committee with respect to its response to the proposal.

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“There can be no assurance that any definitive offer will be made, that any agreement will be executed or that this or any other transaction will be approved or consummated,” it said.