This undated photo shows the Central district of Hong Kong. (CHAN LONG HEI / BLOOMBERG)

The sale of a majority stake in high-end Hong Kong supermarket chain City’super is attracting initial interest from suitors including China Resources Group and Yonghui Superstores Co, according to people with knowledge of the matter.

City Super Group, founded in 1996, has 21 stores in Hong Kong, seven in Shanghai and seven in Taiwan across its three brands, according to its website

Some Hong Kong business tycoons are also among potential bidders studying the business, said the people, who asked not to be identified as the information is private. The Fenix Group has been exploring the sale of a stake in the supermarket operator that could fetch US$300 million to US$400 million, Bloomberg News reported in January.

Fenix currently plans to call for first-round bids as soon as late March or early April, although the novel coronavirus outbreak could delay the process as travel restrictions have made site visits on the Chinese mainland virtually impossible, the people said.

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A potential deal could come after months of anti-government protests and the virus outbreak weighed on Hong Kong’s tourism and consumer spending. A shock plunge in oil prices and then global equities could exacerbate the pain. The city’s government in February announced a HK$120 billion (US$15.4 billion) relief package that gave a HK$10,000 handout to permanent residents aged 18 and older, attempting to boost an economy that’s in its first recession in a decade.

City Super Group, founded in 1996, has 21 stores in Hong Kong, seven in Shanghai and seven in Taiwan across its three brands, according to its website. Its City’super groceries are in prominent Hong Kong locations like IFC Mall, just below two gleaming skyscrapers that house the offices of global banks like UBS Group AG as well as the Hong Kong Monetary Authority.

The company’s LOG-ON stores sell cosmetics, stationery, gadgets and clothing. It also has CookedDeli food courts inside its supermarkets.

Japanese entrepreneur

Fenix, set up by Japanese entrepreneur Masaaki Ogino, provided funding for the formation of City Super Group and still owns the majority stake in the business. Peter Woo, a billionaire and former chairman of Hong Kong landlord Wheelock & Co, owned about 39 percent of the company, according to an exchange filing in 2017. Woo plans to retain his stake, the people said.

Deliberations are at an early stage and the companies could decide against a transaction, the people said. Representatives for China Resources and Fenix declined to comment, while a representative for Wheelock said the company doesn’t comment on Peter Woo’s private business. Representatives for City Super Group Yonghui didn’t immediately respond to requests for comment.

China Resources Group is a state-backed conglomerate with businesses spanning consumer products, real estate, energy, financial services and pharmaceuticals, according to its website. Its Hong Kong-listed China Resources Beer (Holdings) Co is the manufacturer of the popular Snow Beer on the Chinese mainland. CR Group also operates CR Vanguard, one of China’s largest retain chains with more than a dozen stores in Hong Kong. The group had a joint venture with Tesco Plc on the Chinese mainland and eventually bought out the business.

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Yonghui Superstores, in which Tencent Holdings Ltd owns about a 5 percent stake, was part of a group that was among the final bidders for German food wholesaler Metro AG’s business on the mainland, Bloomberg News reported last year. Metro in October agreed to sell the operations to Wumei Technology Group Inc, which runs Wumart hypermarkets on the Chinese mainland.