Tencent weighing bid for part of Temasek's stake in Watson

HONG KONG • Chinese Internet giant Tencent Holdings is weighing a bid for part of Temasek's stake in global retailer A.S. Watson Group, people with knowledge of the matter said.

The Singapore investment company is considering selling around a 10 per cent stake in A.S. Watson for about US$3 billion (S$4.05 billion), according to the people, who asked not to be identified because the information is private. That is just under half of its 25 per cent holding.

Tencent may team up with some investment funds for an offer for the stake in A.S. Watson, a unit of Hong Kong tycoon Victor Li's CK Hutchison Holdings, the people said.

The holding has also drawn interest from Chinese tech billionaire Jack Ma's Alibaba Group Holding, according to the people. Potential buyers are being invited to management presentations this month, one of the people said.

Temasek is working with an adviser to consider possibilities for its 25 per cent holding in A.S .Watson after receiving some preliminary interest, Bloomberg News reported in January. It bought the stake in A.S. Watson for HK$44 billion (S$7.6 billion) in 2014. At the time, A.S. Watson's owner said it planned to list the retailer in the next two to three years in Hong Kong and Singapore, pushing back an earlier 2014 target for an initial public offering.

No final decisions have been made, and there is no certainty that the suitors will proceed with firm offers, the people said. Differences in valuation expectations could make reaching a deal difficult, and Temasek may still decide to keep the stake, according to the people.

Representatives for Tencent, Alibaba and Temasek declined to comment.

Differences in valuation expectations could make reaching a deal difficult, and Temasek may still decide to keep the stake, according to the people.

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A version of this article appeared in the print edition of The Straits Times on March 21, 2019, with the headline 'Tencent weighing bid for part of Temasek's stake in Watson'. Print Edition | Subscribe