U.K.'s Sinclair Pharma PLC said it received a takeover offer from China Grand Enterprises Inc. and its Huadong Medicine Co. Ltd. unit.
According to the pharmaceutical company, discussions are still at a very early stage with no certainty of an acquisition offer being made.
Under the U.K. Takeover Code, the Chinese firms are required to announce their intentions by Aug. 2.
Following news of the potential transaction, Sinclair Pharma's stock price was up 20.31% to 22 pence as of 3:48 p.m. London Time, July 5.
London-based Sinclair Pharma makes and sells dermatological products worldwide.