Hutchison drops plan to sell ParknShop supermarkets business

Reuters

Oct 18 (Reuters) - Hutchison Whampoa, controlledby Asia's richest man, Li Ka-shing, has scrapped a plan to sellits Hong Kong supermarkets business, ParknShop and will insteadfocus on expanding in China, it said on Friday.

The sale of ParknShop, which operates 345 stores in HongKong, China and Macau, had been expected to fetch between $3billion and $4 billion, with prospective bidders includingprominent retailers, such as state-owned China ResourcesEnterprises, Japan's Aeon Co Ltd andAustralia's Woolworths Ltd.

But Hutchison has decided not to sell after conducting aninitial strategic review with advisors Goldman Sachs and Bank ofAmerican Merrill Lynch, it said in a filing to the HongKong Stock Exchange on Friday.

"The company has decided not to pursue a private sale of itsParknShop business at this time and will continue to implementan accelerated growth strategy with a particular focus inmainland China," Hutchison said.

The ports-to-energy conglomerate said selling ParknShopwould not deliver maximum value to its shareholders.

Hutchison also said it planned to conduct a strategic reviewof its health and beauty retail business A.S. Watson & CompanyLimited with possible options including public offerings of allor some of those businesses in appropriate markets.

Established in 1973, ParknShop had a 40 percent share of theHong Kong market for supermarkets in the year to June, accordingto Nielsen Homescan, with Dairy Farm at 33 percent.

ParknShop generated HK$21.7 billion in revenue last year andearnings before interest, tax, depreciation and amortisation ofHK$1.4 billion, another person familiar with the matterpreviously told Reuters.

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