CP shopping in Hong Kong
- Published: 30/08/2013 at 06:28 PM
- Online news:
Thailand's Charoen Pokphand Group is bidding for the ParknShop supermarket chain controlled by Hutchison Whampoa in Hong Kong, say three people with knowledge of the matter.
Hutchison, the Hong Kong conglomerate controlled by billionaire Li Ka-shing, is in talks with about five potential buyers after reviewing first-round bids for the 345-outlet chain.
The conglomerate is seeking between US$3 billion and US$4 billion for the business, a person familiar with the sale said this month.
CP is the parent of SET-listed CP All Plc, which runs the 7-Eleven convenience store chain in Thailand.
A customer examines apples at a ParknShop Superstore in Hong Kong. (Photo: Bloomberg)
ParknShop attracted eight offers in mid-August from suitors including China Resources Enterprise, according to people with knowledge of the process.
The supermarket operator, which sells everything from eggs to whiskey, is one of the two largest chains in Hong Kong’s $6.6-billion supermarket industry.
China Resources, KKR & Co, TPG Capital, Japan's Aeon Co and Woolworths Ltd were among those who made offers in the first round in August, according to people with knowledge of the matter. TPG has since dropped out, said a source.
Billionaire Dhanin Chearavanont's CP Group is buying at home and abroad, accounting for more than half of the $27 billion in acquisitions announced in the last year by Thai companies, including CP's purchase of a $9.4-billion stake in China's Ping An Insurance.
CP All recently made Thailand's largest-ever takeover with the 189-billion-baht purchase of the discount wholesaler Siam Makro Plc.
Suthana Hongthong, assistant vice-president for corporate communication affairs at CP Group, declined to comment on Friday. Jeremy Lau, a spokesman for Hutchison, also declined to comment on the ParknShop sale.
Hong Kong-based China Resources has said it may partner with Tesco Plc to bid for ParknShop, which had revenue of HK$21.7 billion (US$2.8 billion) last year, and has more than 270 of its 345 outlets in Hong Kong.
Hutchison is looking into a sale as it accelerates overseas investments and expands in telecommunications.
Sales growth in Hong Kong’s supermarket industry slowed to 7.7% in June from last year’s annual increase of 11% and a 2011 peak of 13%, government statistics show.
ParknShop had 33% of the Hong Kong grocery market in 2012, trailing Wellcome, controlled by Singapore-listed Dairy Farm International Holdings Ltd, with 40%.
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