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ParknShop

Li Ka-shing 'plans to sell ParknShop for US$2b'

PUBLISHED : Saturday, 20 July, 2013, 12:00am
UPDATED : Saturday, 20 July, 2013, 5:11am

Li Ka-shing is reported to have hired the investment banks Goldman Sachs and Bank of America/Merrill Lynch to sell his ParknShop supermarket chain for as much as US$2 billion.

The deal could channel cash towards the tycoon's ports-to-telecoms conglomerate Hutchison Whampoa.

According to a report in The Wall Street Journal, the group decided to sell the supermarket chain last month in a bid to raise cash to help it through one of its most challenging business environments for years.

The report said details of the company and sale would be sent to potential bidders soon.

It added it was common practice for Li to hive off assets to keep profits growing in difficult times.

It pointed to the sale of Hutchison Whampoa's port assets in Singapore in 2011 - on which a HK$44.3 billion gain was booked - as a prime example.

Li plans to exit the grocery-store market, which is an effective duopoly, in part because it is mature and growing slowly, the report said. Its rival Wellcome is owned by Dairy Farm International Holdings.

Neither officials at Hutchison Whampoa nor the investment banks were available to answer inquiries by the Post.

Civic Party lawmaker Ronny Tong Ka-wah thought it was a good thing for Hutchison Whampoa to sell ParknShop.

He said: "It is better to have a different owner for the supermarket chain business in Hong Kong, as Li's empire already has monopolies in too many markets in the city."

But unionist lawmaker Wong Kwok-hing said the news was shocking and urged Hutchison Whampoa to explain the move.

He said: "ParknShop is the main supplier of essential commodities like rice and oil in Hong Kong.

"They have to assure consumers that the sale of the chain will not affect them."

 

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