Swellfun shares swell on Diageo offer

SHANGHAI - Shares of premium liquor maker Sichuan Swellfun Co surged by the daily limit in Shanghai trading after Diageo Plc said it plans to buy out the Chinese company for 610 million pounds ($907 million).

Swellfun jumped 10 percent to 23.74 yuan on Tuesday, the biggest gain since Nov 30, while China's benchmark Shanghai Composite Index fell 0.53 percent. The stock has gained 3.6 percent this year.

Diageo plans to raise its stake in Swellfun's parent to 53 percent from 49 percent, which would make it the listed unit's controlling shareholder and require an offer for all shares the London-based company didn't own. That offer would be made after Diageo won regulatory approval to buy the stake in parent Chengdu Quanxing Group and be at a minimum price of 21.45 yuan for each Swellfun share.