3/10/2008 9:43:50 AM Monday, Tongjitang Chinese Medicines Co. (TCM) said it received a proposal to buy all its outstanding shares for US$2.55 per share, or US$10.20 per ADS, in cash. The Shenzhen-based company received the proposal letter on March 9 from its chairman and chief executive officer Xiaochun Wang and a director Yongcun Chen.

As per the proposal, the shares of the company will be acquired in a scheme of arrangement transaction under Cayman Islands law that would result in the company becoming a privately held one. The proposal is expressed to be subject to obtaining committed financing and the execution of satisfactory definitive agreements.

Tongjitang noted that its Board of Directors other than Wang and Chen is considering the proposal. The company is planning to form a special committee of the Board of Directors, composed of two of independent directors, in connection with this process.

In addition, the company is considering appointing an independent financial advisor to advise it on this matter.

Tongjitang is a specialty pharmaceutical company focusing on the development, manufacturing, marketing and selling of modernized traditional Chinese medicine. The company's flagship product, Xianling Gubao, is a major traditional Chinese medicine for the treatment of osteoporosis in China as measured by sales in Renminbi amounts.

TCM closed Friday's regular trading session at $6.60.