Yonghui boosts stake in Chinese grocery retailer Zhongbai
Dairy Farm Group-backed Yonghui Superstores is to boost its interest in Central Chinese regional supermarket chain, Zhongbai Holdings.
According to a stock exchange filing in Shanghai, reported by Mingtiandi, Yonghui is offering RMB8.10 per share to take its stake in the company from 30 per cent to 40 per cent. The deal is worth RMB559 million (US$83.3 million) and the shares will be bought from a state investment fund.
Zhongbai, based in Wuhan, has 1255 stores, mostly in central China, including supermarkets, convenience stores, neighbourhood fresh-produce shops, foodmarkets and a premium grocery concept.
Dairy Farm Group has a 20 per cent stake in Yonghui and has continued to invest in the business to maintain that shareholding as other investors, including Tencent and JD have invested in the retailer’s growth. Jardine Matheson executive chairman Ben Keswick is Yonghui’s chairman.
Yonghui currently has just a single store in Hubei province, which means the investment will give it instant critical mass in the region. The company has more than 950 supermarkets in 22 Chinese provinces, its strongest representation in Guangdong.