US retail giant Wal-Mart Stores has remained tight-lipped over reports it is considering placing a bid for ParknShop, one of Hong Kong’s leading supermarket chains.
The retail chain was last month put under review by its parent, the retail-to-energy conglomerate Hutchison Whampoa. The firm said it was conducting a “strategic review” of ParknShop in order to “optimise value for shareholders”.
Since then, a number of companies including China Resources Enterprise, Japan’s AEON, Australian retailer Woolworths Ltd and China’s Sun Art Retail Group, have all been reported to be considering a bid for the chain. Private-equity firms including KKR are also said to be weighing up an offer.
Wal-Mart has become the latest retailer mooted to be interested in placing a bid. According to Reuters, the firm is working with a bank as it weighs up its options for ParknShop ahead of next week’s reported preliminary bid deadline of 16 August.
A spokesperson for Wal-Mart, however said: “We don’t comment on rumours and speculation”.
Wal-Mart has been ramping up expansion in China of late. Last month it confirmed plans to expand its Sam’s Club store network in the country as it looks to “speed up” the development of the format in China.
At the time, a spokesperson for Wal-Mart China reiterated that the country is a “strategically important market” for the retailer. It currently operates around 396 retail locations in the country.
On revealing news of the review last month, Hutchison Whampoa said it did not have a definite timetable for completion and therefore there could be “no assurances” the process will result in any transaction being announced or completed.
ParknShop claims to be the market leading food retailer in Hong Kong with a “significant” market position in Macau and south China. It operates 345 stores and had revenues of HK$21.7bn (US$2.80bn) in 2012.
A source told Bloomberg last month that the supermarket chain could fetch $3bn to $4bn in a sale.
For our Deal or no deal analysis of the companies that could look to buy ParknShop, click here.