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‘Temasek is considering options for AS Watson stake’
Posted on Tuesday, 08 January 2019 11:36
Singaporean investment group Temasek Holdings is reportedly weighing alternatives for its 25.0 per cent holding in Hong Kong-based health and beauty retailer AS Watson Group, including a partial exit.
Bloomberg was first to cite people with knowledge of the matter as saying the state-owned private equity firm is working with an advisor to consider options for the interest after receiving preliminary interest from third-parties.
This was repeated by Reuters, which got its information from a single source who observed talks have begun for Temasek to offload a small portion of its stake in AS Watson.
The investor acquired its 25.0 per cent holding from CK Hutchison, the majority owner of the potential target, in 2014 for roughly HKD 44.00 billion (USD 5.62 billion).
At the time of the purchase, the controlling shareholder said it planned to take AS Watson, one of the world’s largest health and beauty retailers, public in the next two to three years following the investment.
However, Bloomberg cited Steven Leung, executive director at UOB Kay Hian Hong Kong, as saying that hopes of a stock market flotation are fading, and it is understandable why Temasek would want to sell down its stake.
Sources observed that deliberations are still at an early stage and there can be no guarantee they will lead to an agreement.
Founded in Hong Kong in 1841, AS Watson now has over 14,500 stores in 24 markets, with over 4.00 billion customers and members shopping its 12 retail brands in store and online every year.
The company has 140,000 employees worldwide, 12,900 of which are located in its homeland.
AS Watson is the group behind leading retailers Superdrug and the Perfume Shop in the UK and Rossmann pharmacies in Germany.
CK Hutchison reported that is retail earnings before interest, taxes, depreciation and amortisation increased 15.0 per cent to HKD 7.53 billion in the first six months of 2018 on revenue that climbed 14.0 per cent to HKD 83.87 billion.
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