The interior of city'super in Harbour City. (PHOTO / BLOOMBERG)

A group led by China Resources Capital Management Ltd is close to buying a majority stake in City’super, valuing the high-end Hong Kong supermarket chain at almost US$300 million, people with knowledge of the matter said.

Fenix 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

CR Capital, the alternative investments arm of state-owned conglomerate China Resources Holdings Co, and its co-investors plan to acquire 65 percent of City Super Group from owners led by The Fenix Group, according to the people. Hong Kong billionaire and former Wheelock & Co chairman Peter Woo, who owns about 39 percent of the grocery chain, intends to sell down part of his stake, the people said.

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CR Capital plans to take a 45 percent stake while Asia Food Brands Private Equity, jointly set up by Investcorp SA, China Resources and Fung Investments, will pick up 20 percent, the people said. Fung Investments is a private investment vehicle of Hong Kong billionaire brothers Victor and William Fung.

The parties intend to sign an agreement as soon as this week, said the people, who asked not to be identified as the information is private.

The deal comes as the Hong Kong special administrative region’s economy is reeling following months of anti-government protests as well as the resurgent coronavirus outbreak. The special administrative region’s retail sales by value fell 24.8 percent in June on a yearly basis, with the biggest declines by category seen in jewelry, watches and valuable gifts. Supermarket sales rose by 4.5 percent from a year ago.

City Super Group, founded in 1996, has 20 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 such as IFC Mall, which sits below the offices of global banks like UBS Group AG as well as the Hong Kong Monetary Authority. The company also owns the LOG-ON retail brand and CookedDeli food courts.

Fenix 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.

ALSO READ: Hong Kong City’super owner explores majority stake sale

Discussions for the transactions are ongoing and could be delayed or fall apart, the people said. A representative for China Resources Holdings declined to comment. Representatives for CR Capital and Wheelock had no immediate comment on the matter. Representatives for City Super Group and Fenix did not respond to requests for comment.

The businesses of China Resources Group, the conglomerate’s top-level entity, span consumer products, real estate, energy, financial services and pharmaceuticals, according to its website. It operates CR Vanguard, one of the mainland’s largest retail chains, which has more than a dozen stores in Hong Kong.

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