The Lau brothers - of Chinese Estates Holdings - have teamed up with Chow Tai Fook Enterprise, which controls New World Development, to pay HK$3.53 billion for Sogo Hong Kong's flagship building in Causeway Bay and its department store business.
New World chairman Cheng Yu-tung yesterday confirmed the Lau brothers had sealed a deal with Sogo and promised to sell a 50 per cent stake to Chow Tai Fook, controlled by the Cheng family.
Mr Cheng said its acquisition was not made by New World which was engaged in a debt-reduction exercise. He said Chow Tai Fook held cash on hand of HK$6 billion to HK$7 billion.
He said the acquired property and department store business could provide an investment yield of 9 per cent to 10 per cent, adding that the Sogo store would continue to operate under its brand name and there would be no lay offs after the acquisition.
Executives of Sogo Hong Kong and the Lau brothers declined to comment.
Amoy Properties, a bidder for the Sogo property, was beaten in the race. Wharf (Holdings) and Sun Hung Kai Properties were also believed to have shown interest earlier.