Beijing Sanyuan Foods, a struggling partner of hamburger chain McDonald's, is in talks to sell a stake to Taiwan's biggest food company.
Sanyuan confirmed it was considering selling shares to Taiwan's Uni-President Enterprises and other potential strategic investors in a filing to the Shanghai Stock Exchange. Reports that it had already sold a 35 per cent stake for four yuan a share to Uni-President were 'seriously out of touch with reality', it said.
With a 50-year history, Sanyuan is Beijing's best-known dairy company and owns 50 per cent of a joint venture with McDonald's operating more than 100 outlets in and around Beijing.
It has fallen on hard times recently and last year reported a net loss of 62 million yuan, compared with a loss of 126 million in 2004.
Its stock is classified as 'special treatment', the first step in an eventual delisting from the Shanghai exchange.
The State-owned Assets Supervision and Administration Commission of the Beijing city government, which controls Sanyuan, was the instigator of a plan to invite foreign investors to take a minority stake and handle management to improve the firm's flagging performance. Bids were invited from Germany, Australia and the US.