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Tesco seeking to purchase a stake in Chinese superstores

Tesco Plc, the largest UK food retailer, may buy a 50 percent stake in 25 superstores in China, joining Carrefour SA and Wal-Mart Stores Inc in the world's most populous nation, people familiar with the plan said.

Ting Hsin International Group (頂新), controlled by four Taiwanese brothers, hired J.P. Morgan Chase & Co to find a buyer for the stake, the people said, asking not to be identified.

Tesco, based in Cheshunt, England, may offer US$200 million, said Standard & Poor's European MarketScope, citing unidentified traders.

The UK retailer more than doubled its sales outside Britain to 25 percent in its most recent half-year.

It doesn't have stores in China, where Carrefour, Europe's biggest retailer, had the fifth-largest share of last year's US$554 billion in revenue.

"We haven't made any secret about our interest in China, and we are talking to several possible partners," said Peter Bracher, a spokesman for Tesco.

"We are deliberately being very cautious about China and we are quite happy to take our time," he said.

He declined to elaborate.

Dorothy Lee, a spokeswoman for J.P. Morgan Chase in Hong Kong, declined to comment. Calls to Wei Ying-chiao (魏應交), chairman of Ting Hsin's hypermarket business, Hymall, were not returned. Vincent Chan, special assistant to chairman Wei, did not return calls.

Hymall has 25 stores in China, said Gu Wei, a general manager at the retailer in Shanghai. The shops are also known by the name Le Gou (樂購), meaning happy shopping in Chinese, with 10 located in Shanghai, the nation's largest commercial center.

The Wei brothers last month sold half of a China soft-drinks venture managed by Tingyi (Cayman Islands) Holding Corp (頂益控股) to Asahi Breweries Ltd, Japan's biggest beer maker, and Itochu Corp for as much as ?45 billion (US$408 million) to increase sales in the world's most populous nation.

The Wei brothers founded Tingyi Holdings, an instant noodle maker, in 1992. It's now the biggest maker of the foodstuff in China, and a third of the company is owned by Ting Hsin.
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