(Reuters) – Hutchison Whampoa (0013.HK: Quote, Profile, Research, Stock Buzz), controlled by Asia’s richest man, Li Ka-shing, has scrapped a plan to sell its Hong Kong supermarkets business, ParknShop and will instead focus on expanding in China, it said on Friday.
The sale of ParknShop, which operates 345 stores in Hong Kong, China and Macau, had been expected to fetch between $3 billion and $4 billion, with prospective bidders including prominent retailers, such as state-owned China Resources Enterprises (0291.HK: Quote, Profile, Research, Stock Buzz), Japan’s Aeon Co Ltd (8267.T: Quote, Profile, Research, Stock Buzz) and Australia’s Woolworths Ltd (WOW.AX: Quote, Profile, Research, Stock Buzz).
But Hutchison has decided not to sell after conducting an initial strategic review with advisors Goldman Sachs and Bank of American Merrill Lynch (BAC.N: Quote, Profile, Research, Stock Buzz), it said in a filing to the Hong Kong Stock Exchange on Friday.
“The company has decided not to pursue a private sale of its ParknShop business at this time and will continue to implement an accelerated growth strategy with a particular focus in mainland China,” Hutchison said.
The ports-to-energy conglomerate said selling ParknShop would not deliver maximum value to its shareholders.
Hutchison also said it planned to conduct a strategic review of its health and beauty retail business A.S. Watson & Company Limited with possible options including public offerings of all or some of those businesses in appropriate markets.
Established in 1973, ParknShop had a 40 percent share of the Hong Kong market for supermarkets in the year to June, according to Nielsen Homescan, with Dairy Farm (DAIR.SI: Quote, Profile, Research, Stock Buzz) at 33 percent.
ParknShop generated HK$21.7 billion in revenue last year and earnings before interest, tax, depreciation and amortization of HK$1.4 billion, another person familiar with the matter previously told Reuters.