Offers for ParknShop Starts Pouring In
Hutchison Whampoa Ltd. has received eight offers for its Hong Kong Supermarket business ParknShop. The company has set an asking price of US$ 3-4 billion for the business that operates around 345 stores in Hong Kong, Macau and the Chinese Mainland.
Sale proceeds will be used in expanding Hutchison health and beauty retail operations which is said to have a bigger global footprint offering higher margins compared with the supermarket business. Offers started pouring in from Australia’s Woolworth Ltd., South Korea’s Lotte Group, China Resources Ltd., Japan’s Aeon Co., TPG Capital and partner and a private equity firm KKR & Co.
The company’s advisers Goldman Sachs and Bank of America will be assessing the first round offers and results will be announced Friday and in the next few weeks will be short listing its bidders.
At US$ 4 billion, the ParknShop supermarket chain is said to be valued 20 times more in earnings and bidders are attracted by the lack of competition in a market that is dominated by ParknShop and Singapore’s Dairy Farm International Holdings Ltd. The company who will win in the bidding for the supermarket chains can use the business to expand into the mainland, a move proven difficult for some foreign companies.