CP Group, Wal-Mart Emerge as Potential Bidders for Lotte Group's Chinese Supermarkets
Le Yan|Quan Xiaoxing
/SOURCE : Yicai
CP Group, Wal-Mart Emerge as Potential Bidders for Lotte Group's Chinese Supermarkets

(Yicai Global) Sept.19 -- There are around five firms currently in the race for South Korean conglomerate Lotte Group's supermarkets in China, including CP Lotus Supercenter's parent Charoen Pokphand Group, an American warehouse supermarket chain enterprise, thought to be Wal-Mart Stores Inc. [NYSE:WMT], and a US private equity fund, an insider familiar with the Korean distribution sector told Yicai Global.

Lotte Mart has already appointed Goldman Sachs Group [NYSE:GS] to manage the sales process and it will contact potential bidders directly.

One bidder is thought to be a US warehouse supermarket chain that has operated stably for a long time, most likely Wal-Mart. The company previously spent USD1 billion in 2006 to acquire Haoyouduo Supermarket, a Chinese chain, said one supermarket business analyst who was unwilling to reveal the company's name.

Previous reports suggested that Beijing Hualian Group Investment Holding Co. was interested in Lotte's China operations. However, Goldman Sachs is yet to make official contact with the firm, market insiders said.

The sale of Lotte Mart's Chinese supermarkets may be held up due to a gap of around 30 percent between the expected value of Lotte Mart and the potential bid prices from potential buyers, said people familiar with the current stage of the divestment. No potential buyers have expressed that they are willing to accept Lotte Mart's expected value at present.

Lotte values its China business at around KRW830 billion, or about CNY4.83 billion (USD743 million).

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Keywords: South Korea , Lotte Group , Lotte Mart , Chia Tai Group , Wal-Mart , Beijing Hualian Group