Shares of Yum China (YUMC) surged after a report that Chinese tech investor Hillhouse is in talks to buy the fast-food restaurant company.

HILLHOUSE EYES BUYOUT: Hillhouse Capital Group, which is one of China's most prominent tech investors, is in talks to acquire Yum China, The Information reported Thursday. Yum China, which has a market capitalization of roughly $13B, operates over 8,000 KFC and Pizza Hut restaurants across mainland China. A takeover led by Hillhouse would assist the company in accelerating its efforts to implement high-tech initiatives in its brick-and-mortar stores in order to attract Chinese millennials.

WHAT'S NOTABLE: In November 2016, Yum China completed its separation from Yum! Brands (YUM) and began trading as an independent company on the New York Stock Exchange. Yum! Brands' board decided to spin off the company following a review of strategic options in order to "drive value creation."

PRICE ACTION: Yum China is up 14% to $36.83 in morning trading.