What happened

Shares of China Biologic Products (NASDAQ:CBPO) rose nearly 15% today after the company announced that it has received its second buyout offer of the summer.

In June, Chinese investment firm CITIC Capital proposed an all-cash offer to gobble up the blood plasma product leader for $110 per share. Now, a group of investors led by the company's former CEO, David Gao, has made an all-cash offer to do the same, but this time at $118 per share. The deal would value the company at $3.9 billion. 

As of 12:32 p.m. EDT, the stock had settled to a 11% gain at around $102 per share.

Man in a suit drawing a yellow step chart that's steadily climbing higher.

Image source: Getty Images.

So what

Despite a growing business and enormous market opportunity in its home country, China Biologic Products has not been able to grow its share price beyond $120, a level first reached in 2015. While that was a premium valuation for the business at the time, it has since grown into its $3 billion-plus market cap. Nonetheless, signs of slowing growth on the bottom line pushed shares below $80 apiece earlier this year.

That drew the attention of China-based institutional investors. They think there's plenty of opportunity in the fledgling blood plasma products market in China. Despite relying on decades-old technology that the United States began moving away from in the 1970s, the groups jockeying for ownership of China Biologic Products might be right about the opportunity, especially from a financial perspective. After all, the business earned a 69% gross profit margin in the first half of 2018. 

Now what

The emergence of a bidding war is good news for shareholders. Now, all investors can do is wait to see who wins and if a deal will be completed at all. Considering there are now two groups interested in owning China Biologic Products (both at a stock price significantly higher than current levels) and that all groups involved are Chinese (making it easier to pass regulatory scrutiny), there's a good chance that occurs.

Maxx Chatsko has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.