Temasek weighing sale of 10% stake in Watson for $4b; Tencent interested, say sources

 Temasek's total 25 per cent holding in A S Watson has reportedly also drawn interest from Chinese tech billionaire Jack Ma's Alibaba Group.
Temasek's total 25 per cent holding in A S Watson has reportedly also drawn interest from Chinese tech billionaire Jack Ma's Alibaba Group. PHOTO: WATSONS

HONG KONG (BLOOMBERG) - Chinese internet giant Tencent Holdings is weighing a bid for part of Temasek Holdings' stake in global retailer AS Watson Group, people with knowledge of the matter said.

The Singapore state investment company is considering selling around a 10 per cent stake in A S Watson for about US$3 billion (S$4.06 billion) , according to the people, who asked not to be identified because the information is private. That's 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, which is a unit of Hong Kong tycoon Victor Li's CK Hutchison Holdings Ltd, 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$7.58 billion) in 2014.

No final decisions have been made, and there's no certainty 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.