Hutchison Whampoa scraps sale of Hong Kong supermarket chain ParknShop
19 Oct 2013
Hutchison Whampoa Ltd, the investment holding company controlled by Hong Kong's richest man, Li Ka-shing, yesterday said that it has scrapped plans to sell its Hong Kong supermarket chain ParknShop and will instead focus on growth in China.
''After completing an initial strategic review with its advisors Goldman Sachs and Bank of America Merrill Lynch of its supermarket retail business operating under the head brand name of ''ParknShop'' (PNS), Hutchison Whampoa Limited has concluded that a sale of PNS by way of a private market transaction at this time would not deliver maximum value to the shareholders of the Company,'' Hutchison Whampoa said in a statement.
''Accordingly, the Company has decided not to pursue a private sale of its PNS business at this time and will continue to implement an accelerated growth strategy with a particular focus in Mainland China.''
The company said that it has also decided to expand its strategic review process to include all options for maximising the value and future growth potential of its health and beauty retail business A S Watson & Co.
In July, Hutchison Whampoa had said that it is conducting a strategic review of its super market retail business ParknShop, and had hired Goldman Sachs and Bank of America Merrill Lynch to handle the sale. (See: Hutchison Whampoa plans sale of ParknShop supermarket chain)
The sale had expected would have fetched the Hong Kong-listed conglomerate around $3 billion to $4 billion, according to analysts.
Several media reports had earlier said that the proposed sale had attracted offers from many suitors, including private-equity firms TPG Group and KKR & Co, local retailer China Resources Enterprise Ltd, Japan's Aeon Co and Lotte Group, Australia's Woolworths Ltd and Wesfarmers Ltd, China's biggest hypermarket chain Sun Art Retail Group Ltd and Wal-Mart.
ParknShop is the market-leading food retailer in Hong Kong with significant market position in Macau and South China.
Founded in 1973, ParknShop is the second-largest grocery store chain in Hong Kong with a 19-per cent market share. It has 345 stores in Hong Kong, Macau and southern China and had revenues of HK$21.7 billion ($2.8 billion) in 2012.
Its main competitors are Wellcome, which operates 302 stores, has 15 per cent market share, according to Nielsen.
