Lotte Shopping Co, South Korea’s biggest department store owner, is in talks to buy a controlling stake in Chinese supermarket operator Times Ltd (時代零售集團), rivaling a bid from Wumart Stores Inc (物美商業集團), two people familiar with the matter said.
Seoul-based Lotte Shopping is in discussions to pay cash for a 72.3 percent stake in Times from chairman Kenneth Fang (方鏗), the people said, asking not to be identified because the talks are private. Times shares were suspended in Hong Kong after rising as much as 5.6 percent to a two-year high. The company has a market value of US$523 million.
Lotte Shopping is attempting what could be the biggest acquisition in China by a South Korean company, data compiled by Bloomberg showed. The retailer, which operates a department store in Beijing, would add 65 outlets in the world’s fastest-growing major economy with a purchase of Times. Wumart said on Sept. 24 it had held talks with Times.
“Lotte has a small presence in China and it needs the scalability to bolster sales from the current level of operation,” said Han Kook Hee, an analyst at Mirae Asset Securities Co with a “buy” rating on Lotte shares. “The first step is to expand through acquiring a hypermarket brand as it takes very long to build a franchise in China.”
Shares in Lotte advanced 0.8 percent to 305,000 won (US$260.44) in Seoul. The stock has climbed 45 percent this year.
Lee Sun-dae, a spokesman for Lotte, confirmed yesterday in a telephone interview the company is considering buying Times though no decision has been made. Officials at Wumart couldn’t be reached as China was closed for national holidays last week. Fang’s secretary, Kathy Chen, said he wasn’t immediately available for an interview.
Lotte is pushing into developing markets by expanding in China, Vietnam, Indonesia and Russia, seeking to tap rising affluence among consumers in those countries.
Wumart, Beijing’s biggest supermarket chain, plans to offer cash and stock for Times, the sources said. The company said last month it has had “preliminary discussions” with Times about an unspecified possible transaction. There have been no further developments after the initial talks and there’s no assurance a deal will be struck, Wumart said.
Lotte Shopping operates a department store in Beijing with Intime Department Store (Group) Co (銀泰百貨) and has fewer than 10 hypermarkets in China, Han said. The company acquired 49 percent of CTA Makro (中貿聯萬客隆), which operates supermarkets in Beijing and Tianjin, in 2007 and bought the remainder the following year.
Times said on Sept. 24 it was in talks with “a number of participants” as part of a “strategic review” and that it “has not yet selected a preferred partner.” The company could pick a buyer as early as this month, the people said.
Shares in Times have soared 125 percent this year, beating the benchmark Hang Seng Index’s 50 percent advance. The company’s profit fell 13 percent to 77.5 million yuan (US$11.4 million) in the first half as costs increased.
Times operates 53 hypermarkets and 12 supermarkets in eastern China with a total gross floor area of about 892,628m², the company’s Web site said. The company said last month it plans to open 17 more hypermarkets in the country.
Quanta Computer Inc (廣達) chairman Barry Lam (林百里) is expected to share his views about the artificial intelligence (AI) industry’s prospects during his speech at the company’s 37th anniversary ceremony, as AI servers have become a new growth engine for the equipment manufacturing service provider. Lam’s speech is much anticipated, as Quanta has risen as one of the world’s major AI server suppliers. The company reported a 30 percent year-on-year growth in consolidated revenue to NT$1.41 trillion (US$43.35 billion) last year, thanks to fast-growing demand for servers, especially those with AI capabilities. The company told investors in November last year that
Taiwanese suppliers to Taiwan Semiconductor Manufacturing Co. (TSMC, 台積電) are expected to follow the contract chipmaker’s step to invest in the US, but their relocation may be seven to eight years away, Minister of Economic Affairs J.W. Kuo (郭智輝) said yesterday. When asked by opposition Chinese Nationalist Party (KMT) Legislator Niu Hsu-ting (牛煦庭) in the legislature about growing concerns that TSMC’s huge investments in the US will prompt its suppliers to follow suit, Kuo said based on the chipmaker’s current limited production volume, it is unlikely to lead its supply chain to go there for now. “Unless TSMC completes its planned six
Intel Corp has named Tasha Chuang (莊蓓瑜) to lead Intel Taiwan in a bid to reinforce relations between the company and its Taiwanese partners. The appointment of Chuang as general manager for Intel Taiwan takes effect on Thursday, the firm said in a statement yesterday. Chuang is to lead her team in Taiwan to pursue product development and sales growth in an effort to reinforce the company’s ties with its partners and clients, Intel said. Chuang was previously in charge of managing Intel’s ties with leading Taiwanese PC brand Asustek Computer Inc (華碩), which included helping Asustek strengthen its global businesses, the company
Power supply and electronic components maker Delta Electronics Inc (台達電) yesterday said second-quarter revenue is expected to surpass the first quarter, which rose 30 percent year-on-year to NT$118.92 billion (US$3.71 billion). Revenue this quarter is likely to grow, as US clients have front-loaded orders ahead of US President Donald Trump’s planned tariffs on Taiwanese goods, Delta chairman Ping Cheng (鄭平) said at an earnings conference in Taipei, referring to the 90-day pause in tariff implementation Trump announced on April 9. While situations in the third and fourth quarters remain unclear, “We will not halt our long-term deployments and do not plan to
RSS