Sogo owners to spin off parts of property empire
Lifestyle International, which operates the Sogo department store in Hong Kong and Jiuguang department stores on the mainland, aims to spin off part of its property investments on the Hong Kong stock exchange by June.
Market sources said the firm aimed to raise between HK$200 million and HK$300 million by way of introduction instead of an initial public offering. That means shares would be issued either to Lifestyle shareholders or private investors.
The firm's annual report shows it owns several mainland properties, including Lifestyle Plaza, a Tianjin department store with 36,221 square metres of gross area, a commercial building in Qingdao, Shandong, with 26,507 sq metres of gross area, and a smaller commercial building in Harbin, Heilongjiang.
But its management refused to say which properties would be spun off and which retained.
Traffic at Sogo Causeway Bay has stabilised in the first quarter after dropping slightly last year, which Lifestyle's management blamed partly on a high base for comparison in 2011.
Sogo's flagship Tsim Sha Tsui store will close in February next year.
The landlord, New World Development, decided to terminate the lease after the developer's chairman, Cheng Yu-tung, relinquished his role to his son, Henry Cheng Kar-shun.
On March 25, majority shareholder Real Reward, owned equally by Lifestyle chief executive Thomas Lau Luen-hung and Chow Tai Fook Enterprises, a company controlled by the Chengs, unloaded a 13.8 per cent stake in Lifestyle.
Lau and his brother Joseph acquired half of the 230 million shares sold, and Chow Tai Fook took the rest.
After the disposal, Real Reward's interest in Lifestyle fell to 51.04 per cent.
Market speculation suggests that Chow Tai Fook will seek to sell its stake in the retailer.
But Thomas Lau said yesterday that he was not sure whether the Chengs intended to dispose of their stake in Lifestyle.
"The [recent sale by Real Reward] was to make it more flexible in terms of further financial arrangements," Lau said.
Cheng Yu-tung was admitted to hospital in September 2012 and he has not been seen in public since then.