(Reuters) - Diageo Plc <DGE.L>, the world's largest spirits company, said it has proposed to increase its stake in Chinese baiju maker Sichuan Shujingfang Company to raise its stake to up to 60 percent through a partial tender offer.
Diageo offered 62 CNY ($9.50) per Sichuan share of Sichuan, the company said in a statement. It currently holds a 39.71 percent stake.
The British-based maker of Johnnie Walker Scotch and Smirnoff vodka offered close to a 25 percent premium to Sichuan's closing price of 49.6 CNY on Monday.
Sichaun said that Diageo would pay a maximum of 6.15 billion CNY ($941.24 million) and that Diageo would fund the deal on its own.
Sichaun said it would not be de-listed if the deal goes through.
China currently represents a relatively small part of Diageo's business. Its exposure to the world's most populous country is mostly through its Scotch brands, as well as its investment in ShuiJingFang's Swellfun, a premium brand of the fiery white spirit.
Diageo shares were down about 2 percent and ShuiJingFang shares were up about 2 percent.
(Reporting by Sangameswaran S in Bengaluru and Martinne Geller in London; editing by Jason Neely)