10pc stake in Parkson Retail priced at upper end in mildly oversubscribed offer Malaysian conglomerate Lion Diversified Holdings is set to reap as much as US$171 million through the disposal of a 10 per cent stake in mainland department store operator Parkson Retail Group, according to market sources. Lion Diversified, which owns 65.5 per cent of Parkson, is selling about 55 million shares near the top end of a range between HK$23.60 and HK$24.20 per share after the offer was oversubscribed 'a few times', said a source. The offer price range represents a discount of 6.9 per cent to 9.2 per cent to the last trading price of HK$26 on Monday. Parkson shares were suspended from trading yesterday. Lion Diversified initially offered to sell 44 million Parkson shares, worth US$137 million. The deal, arranged by BNP and Citigroup, could be increased to US$171 million with an 11 million-share over-allotment option, according to a source. Parkson, which runs 39 department stores in 26 cities in China, raised HK$1.87 billion in an initial public offering late last year by selling 190.44 million shares at HK$9.80 each. About 30 per cent of the shares sold in the IPO belonged to Lion Diversified. A fund manager, who preferred not to be named, said he did not take part in the latest placement because 'Parkson is too expensive'. Parkson earlier this month reported first-half net profit of 196.2 million yuan, compared with 106.5 million yuan in the period a year ago. Turnover rose 86.7 per cent to 942.5 million yuan from 794.9 million yuan. Same-store sales rose 17 per cent, it said. Parkson has said it would drive growth by buying minority interests in the joint ventures it formed with mainland partners before 2005 when foreign investors were not allowed to own an entire company. Parkson last month completed the acquisition of the remaining 44 per cent stake in subsidiary Beijing Parkson - which has five stores in China - for 525 million yuan. The company plans to open three stores in Shanghai, Hangzhou and Xian next year, each costing between 20 million and 30 million yuan, according to managing director Alfred Cheng Yoong Choong. Khazanah, the investment holding arm of the Malaysian government, bought about 30 per cent of the shares sold in the Parkson IPO. The shares under placement were scheduled to be traded today.