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Thailand's CP in running for Hong Kong's ParknShop supermarket chain
Publication Date : 03-09-2013
Dhanin Chearavanont, Thailand's richest man, is moving towards placing another piece in the jigsaw as he grows his retail business regionally, with Charoen Pokphand's (CP) bid for Hong Kong's ParknShop supermarket chain.
Dominating the convenience-store segment in Thailand through CP All, which operates about 8,000 7-Eleven outlets, Dhanin has set his sights on expanding throughout Asia with the ParknShop brand.
CP All, Dhanin's retail arm, in April spent 189 billion baht (US$5.9 billion) to take over Thailand's leading cash-and-carry wholesale business, Siam Makro, which would mainly be used as a new distribution channel to export products from small and medium-sized enterprises as well as agricultural goods, such as fresh and frozen produce, to Asean countries.
A retail expert who declined to be named said Charoen Pokphand Group's bid for Hutchison Whampoa's chain of ParknShop stores would allow CP to have a larger retail network in the region.
According to a recent report by Bloomberg, Hutchison, a Hong Kong conglomerate controlled by billionaire Li Ka-shing, was in talks with about five potential buyers after reviewing first-round bids for its ParknShop chain.
Hutchison is seeking $3 billion to $4 billion for the unit, claimed a person familiar with the sale. Berli Jucker, a unit owned by liquor tycoon Charoen Sirivadhanabhakdi, is not bidding for ParknShop, Phidsanu Pongwata-na, senior vice president of the Thai firm's retail business group, said on Monday.
The company would rather develop its own retail brands using Vietnam as its first market for this venture.
"Not manufacturing, but modern retailing will be a new global trend. CP has got gradually involved in retail business in the region since many years ago when it opened Super Brand Mall and Lotus stores in China. And acquiring ParknShop would be another jigsaw piece to complete its retail network's development in the region," he said.
According to the report, ParknShop attracted eight offers in mid-August from suitors which included China Resources Enterprise and Sun Art Retail Group. ParknShop, which sells everything from eggs to whisky, is one of the two largest chains in Hong Kong's $6.6-billion supermarket industry.
KKR and Co, TPG Capital, Japan's Aeon Co and Woolworths were also among those who made offers in the first round of bidding. TPG and KKR have since dropped out of the process.
While some bidders who do not have operations in Hong Kong are asking Hutchison to retain a small stake in ParknShop and continue managing the stores, Hutchison would prefer an outright sale, the report said.
ParknShop had 33 per cent of the Hong Kong grocery market in 2012, trailing Wellcome, controlled by Singapore-listed Dairy Farm International Holdings, with 40 per cent, according to researcher Euromonitor. CR Vanguard Supermarket, run by state-backed mainland conglomerate China Resources, ranked third with 7.8 per cent.
*with report from Bloomberg