ParkNShop bidder China Resources may sell meat unit -source

Reuters

* Thai billionaire teams up with Carlyle for ParkNShop bid

* Australia's Woolworths also bidding for ParkNShop

* CRE took Ng Fung Hong private in 2001 for $662 mln

By Denny Thomas and Stephen Aldred

HONG KONG, Oct 8 (Reuters) - China Resources Enterprise Ltd is set to launch a strategic review of its Hong Kongmeat distribution unit, a person familiar with the matter said,as it readies funds to bid for tycoon Li Ka-shing's ParkNShopsupermarket business.

Li's Hutchison Whampao Ltd has put Hong Kong'sdominant supermarket business up for sale, asking for $3-4billion. The operator of China's second-largest supermarketchain has said it is interested in ParkNShop and discussedselling non-core units to fund future acquisitions withoutmentioning specific assets.

State-backed CRE has long been seen as one of thefrontrunners in the auction and a successful bid would give itcontrol of more than half of Hong Kong's $6.6 billionsupermarket industry as well as a brand name considered moretrustworthy than mainland China brands.

The list of suitors for ParkNShop include Thailand's CPGroup, controlled by billionaire Dhanin Chearavanont, which hasteamed up with Carlyle Group, people familiar with theprocess have told Reuters.

Australia's biggest supermarket operator Woolworths Ltd and Japan's Aeon Co Ltd have also expressedinterest, sources have previously said.

There is, however, still a significant gap between theseller's expectations and what suitors are willing to offer,people familiar with the matter said. The CP Group-Carlyle Groupconsortium has made the highest offer, one person said.

The people declined to be identified as the discussions areconfidential.

CRE has yet to decide whether to sell beef supplier Ng FungHong, one person said, which it took private in 2000 valuing thecompany at HK$5.13 billion ($662 million).

Bloomberg first reported CRE's review of its meat unit onMonday.

CRE, CP Group and Carlyle declined to comment.

The Chinese supermarket chain has been expanding in food andother retail operations. In beer, CRE has a joint venture withSABMiller Plc and in beverages, it has tied up withJapan's Kirin Holdings Ltd. It also recently formed ajoint venture with British retailer Tesco Plc..

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