Wal-Mart plans to bid for HK supermarket chain ParknShop

ParknShopWal-Mart Stores Inc is planning to bid for Hong Kong-based supermarket chain ParknShop, which has been put on the block by its owner A S Watson & Co, a firm controlled by Asia's richest man Li Ka-shing.

Wal-Mart, the world's largest retailer, is working with a bank as it weighs its options for ParknShop ahead of next week's preliminary bid deadline, Reuters yesterday reported, citing  people familiar with the matter.

In late July, Hutchison Whampoa Ltd, the investment holding company controlled by Li Ka-shing, announced that its subsidiary A S Watson & Co is conducting a strategic review of its super market retail business ParknShop. (See: Hutchison Whampoa plans sale of ParknShop supermarket chain)

Late last month, Bloomberg reported that private equity firm KKR & Co is talking to banks about financing for a potential bid for ParknShop.

ParknShop is the market-leading food retailer in Hong Kong with significant market position in Macau and South China.

Founded in 1973, ParknShop is the second-largest grocery store chain in Hong Kong with a 33-per cent market share. It has 345 stores in Hong Kong, Macau and southern China and had revenues of HK$21.7 billion ($2.8 billion) in 2012.

Its main competitors are Wellcome with 39.8 per cent market share and CR Vanguard Supermarket with 7.8 per cent.

Li Ka-shing, whose net worth is $27 billion, is seeking around $3 billion to $4 billion from the sale.

Other firms also keen to buy ParknShop are private equity firms TPG Capital and Blackstone Group.