KKR said to consider bidding for Hutchison’s ParknShop chain

HONG KONG – Private-equity firm KKR & Co is evaluating a bid for billionaire Li Ka-shing’s ParknShop supermarket chain, the Bloomberg news agency cited two people with knowledge of the matter as saying.

KKR, which is talking to banks about financing for a potential deal, may decide not to make an offer, said the people, who asked not to be identified because the deliberations are private. Mr Li’s Hutchison Whampoa has asked potential buyers to submit bids for the Hong Kong chain by August 16, people with knowledge of the process said last week.

Hutchison is seeking US$3 billion (S$3.8 billion) to US$4 billion for ParknShop, one of Hong Kong’s two main supermarket chains, according to a person familiar with the matter. That would make it KKR’s biggest deal in Asia, data compiled by Bloomberg show.

“This is ideal for private equity because it’s an asset that can generate very steady cash flows,” said Mr Cusson Leung, a Hong Kong-based analyst at Credit Suisse. “Even though the growth is slower, ParknShop operates in a very stable market.”

A private-equity buyer could consider spinning off ParknShop as a business trust after acquiring it, Mr Leung said.