China's Lenovo Group Ltd. is in talks with a major international IT company regarding an acquisition, it said in an announcement to the Hong Kong Stock Exchange on Tuesday. The other party was not named.
The announcement comes after The New York Times reported on Friday that Lenovo is talking to IBM Corp. regarding an acquisition of IBM's personal computer business. Neither company commented on Friday regarding the report, which said IBM was also talking with at least one other company on a possible deal.
Lenovo said the talks are at an advanced stage but no definitive agreement or letter of intent has yet to be signed. If the talks are successful and an agreement signed, it may constitute a very substantial acquisition, it said. A draft of the announcement regarding the acquisition was also supplied to the Hong Kong exchange and said it hopes to release a formal announcement as soon as possible.
The Tuesday announcement was submitted as part of the process to resume trading in Lenovo shares, which had been suspended since Monday morning. The newspaper report on Friday was published towards the end of the Hong Kong trading day. On Friday the company's shares closed at HK$2.675.
The company requested that trading resume on Tuesday but later in the morning requested it remain suspended "pending further announcement regarding developments with the proposed acquisition."