<p>FAW Group is looking at acquiring Brilliance China Automotive Holdings Ltd, BMW's main Chinese partner, in deals that may cost it some $7.2 billion and then take it private, two people with direct knowledge of the matter told Reuters.</p>.<p>Brilliance shares soared as much as 25.6% to HK$7.99 following the news.</p>.<p>The potential acquisition by state-owned FAW, China's No. 2 automaker, comes at a time when Brilliance's top shareholder Huachen Automotive Group is on the brink of bankruptcy, having defaulted on 6.5 billion yuan ($1 billion) in debt obligations late last year.</p>.<p>Under plans currently being discussed, FAW would first purchase 30.43% of Brilliance owned by Huachen and 11.89% owned by the state-controlled Liaoning Provincial Transportation Investment Group, said the sources.</p>.<p>It would then make a mandatory bid for the rest of Brilliance's shares. It is considering offering about HK$11 per share for the two-stage deal, representing a 70% premium to its average share price over the past month of HK$6.48.</p>.<p>To conduct a deal, FAW is looking at setting up an offshore investment vehicle and is seeking other investors, said the sources, who declined to be identified as the discussions were confidential.</p>.<p>FAW and BMW declined to comment. Brilliance, Liaoning Provincial Transportation Investment Group did not immediately respond to requests for comment.</p>.<p>Huachen said the information was false but did not elaborate. Liaoning province's state asset regulator, which owns a majority stake in Huachen, also did not immediately respond to a request for comment.</p>.<p>Reuters reported in September that Liaoning Provincial Transportation Investment Group was planning to lead a consortium of Chinese state-backed investors to take Brilliance private. However, the plan has been put on hold due to differences in valuations and financing difficulties, said one of the people.</p>
<p>FAW Group is looking at acquiring Brilliance China Automotive Holdings Ltd, BMW's main Chinese partner, in deals that may cost it some $7.2 billion and then take it private, two people with direct knowledge of the matter told Reuters.</p>.<p>Brilliance shares soared as much as 25.6% to HK$7.99 following the news.</p>.<p>The potential acquisition by state-owned FAW, China's No. 2 automaker, comes at a time when Brilliance's top shareholder Huachen Automotive Group is on the brink of bankruptcy, having defaulted on 6.5 billion yuan ($1 billion) in debt obligations late last year.</p>.<p>Under plans currently being discussed, FAW would first purchase 30.43% of Brilliance owned by Huachen and 11.89% owned by the state-controlled Liaoning Provincial Transportation Investment Group, said the sources.</p>.<p>It would then make a mandatory bid for the rest of Brilliance's shares. It is considering offering about HK$11 per share for the two-stage deal, representing a 70% premium to its average share price over the past month of HK$6.48.</p>.<p>To conduct a deal, FAW is looking at setting up an offshore investment vehicle and is seeking other investors, said the sources, who declined to be identified as the discussions were confidential.</p>.<p>FAW and BMW declined to comment. Brilliance, Liaoning Provincial Transportation Investment Group did not immediately respond to requests for comment.</p>.<p>Huachen said the information was false but did not elaborate. Liaoning province's state asset regulator, which owns a majority stake in Huachen, also did not immediately respond to a request for comment.</p>.<p>Reuters reported in September that Liaoning Provincial Transportation Investment Group was planning to lead a consortium of Chinese state-backed investors to take Brilliance private. However, the plan has been put on hold due to differences in valuations and financing difficulties, said one of the people.</p>