Seven PE firms, strategics bid for Hong Kong’s ParknShop – report
Seven private equity and strategic investors have reportedly submitted initial offers for ParknShop, the Hong Kong supermarket chain owned by Hutchison Whampoa. The business, which is ultimately controlled by Li Ka-shing, Asia’s wealthiest individual, has an asking price of $3-4 billion.
According to Reuters, KKR and TPG Capital - the latter working with a partner - have put in bids, alongside Australia's Woolworths, Japan's Aeon, and China Resources Enterprise. The Financial Times added that The Blackstone Group is also involved in the process, with Korea's Lotte and China's SunArt among those to express an interest.
Bank of America Merrill Lynch and Goldman Sachs, Hutchison's advisors, are now expected to assess the first-round offers and draw up a shortlist.
Hutchison is said to be exiting the supermarket space so it can focus on its health and beauty retail operations, which boast higher margins and a larger global footprint. ParknShop has 345 stores in Hong Kong, mainland China and Macau. In Hong Kong, where 270 of these outlets are based, ParknShop has a 40% market share, dominating the local scene with Wellcome, which is owned by Singapore's Dairy Farm International.
The company is said to have generated HK$21.7 billion ($2.8 billion) in revenue last year and EBITDA of HK$1.4 billion.
Hutchison maintains in public that its subsidiary, A.S. Watson & Co, is still conducting a strategic review of ParknShop, which may or may not result in a transaction being announced.
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