Taiwan Nikomart officials deny merger plan reports

Officials at money-losing Taiwan Nikomart Co (福客多), the nation's fifth-largest convenience store chain, yesterday flatly denied media reports that the firm will merge with a larger competitor as early as this year.

Rumors have circulated for years that Taiwan Nikomart, 50 percent controlled by Taisun Enterprise Co (泰山企業), is likely to be absorbed into Taiwan Family-Mart Co (全家便利商店), of which Taisun Enterprise owns a 20 percent stake.

"That's just speculation. Taiwan Nikomart will continue to expand its market share and will not withdraw from the market," said Taiwan Nikomart sales director Jan Chun-ying (詹淳櫻), during a telephone interview yesterday.

Jan said that to turn the business around, the company has implemented an organizational restructuring project, shutting down 60 poorly performing stores last year and streamlining the company's headquarters.

Established in 1990, Taiwan Nikomart ran 300 outlets as of the end of last year -- only a 3-percent share of the industry. It posted losses of more than NT$210 million (US$6.5 million) for the first three quarters of last year.

Taisun Enterprise spokesman Shih Tai-an (施泰安) reiterated on the phone that the company has no plan to offload their shareholding in Taiwan Nikomart although the convenience store chain's former general manager, Fred Chan (詹景超), commented in a recent Taisun board meeting that Taiwan Nikomart's survival was at stake.

"Even so, the board did not discuss mergers with any rival or Taiwan FamilyMart," Shih said.

However, Taisun Enterprise chairman Chan Jen-tao (詹仁道) was reported to have said that the group is looking for an appropriate buyer to take over Taiwan Nikomart.

A report yesterday in the Chinese-language Liberty Times (the sister newspaper of the Taipei Times), said that Chan had said Taisun Enterprise wanted to sell out its shares in Nikomart and leave the convenience store market this year.

Chan said Taiwan Nikomart is actively restructuring its organization and will initiate talks with businesses interested in the acquisition after restructuring is complete, the report said.

Asked whether the small player will be sold to Taiwan FamilyMart, he said, "It's very possible as that will generate the most synergy."

Yeh Jung-ting (葉榮廷), vice president of Taiwan FamilyMart, the market's second-largest operator, said Taiwan Nikomart has yet to approach the firm to talk about a merger deal.

"We never rule out the possibility of expanding our turf through merger and acquisition, but now it's still too early to say that," he said.