China Resources weighs sale of meat unit in Hong Kong
Exiting the business may provide funding for the conglomerate to bid for ParknShop
China Resources Enterprise (CRE), the state-backed retail and beer conglomerate, is evaluating options for its meat distribution unit in Hong Kong that could include a sale, said two people with knowledge of the matter.
CRE might start a strategic review of the business as early as this year, said the people, who asked not to be identified because the information is private. The company took then Hong Kong-listed Ng Fung Hong private in 2001 in a deal that valued it at HK$5.1 billion.
Analysts told the South China Morning Post that the sale would make sense for the firm.
An obvious reason is a source of funds for a potential bid for Li Ka-shing's ParknShop supermarket chain, which was put up for sale in August, with a price tag estimated at US$3 billion to US$4 billion.
Frank Lai Ni-hium, the chief financial officer of CRE, said then that the firm was mulling a joint bid for ParknShop with British retail giant Tesco, with which it has a joint-venture agreement on the mainland.
He said CRE would consider raising debt and disposing of non-core assets to fund the purchase of ParknShop, Hong Kong's biggest supermarket chain.