China Resources Enterprise (CRE) is to pay $2.72 billion to acquire the retail businesses of its parent, China Resources (Holdings) (CRH).
The price for CRC Department Stores and Chinese Arts and Crafts stores represents a 26.9 per cent discount to their combined adjusted net asset values.
The acquisition would be financed with a cash payment of $680.61 million and with $1.36 billion to be raised from a placement of 113 million shares on completion of the arrangement by the end of next month, CRE said.
The remaining $680 million would be paid in cash on March 31.
ING Barings analyst Richard Lo said the acquisition price was fair, as the chains had a combined shop space of 500,000 square feet and some of the stores were at prime locations.
CRE would have about $4 billion cash on hand after the acquisition.