China Resources, Tesco mull joint bid for ParknShop

Tesco, Britain's largest retailer, may join forces with state-backed China Resources Enterprise to bid for ParknShop.

Frank Lai Ni-hium, the chief financial officer of China Resources, said the two companies were "in discussion" that might lead to a possible joint bid for the supermarket chain.

China Resources, which is the largest retailer on the mainland and also owns Hong Kong's third-biggest supermarket chain Vanguard, this month signed a memorandum of understanding with Tesco to merge their hypermarket business on the mainland.

According to sources, ParknShop, the city's biggest supermarket chain with HK$22 billion in annual sales, has so far attracted eight bidders with deals worth between US$3 billion and US$4 billion. Wal-Mart Stores, Lotte Group and Aeon are said to be among the bidders.

Tesco operates a wide range of retail outlets, from hypermarkets to convenience store chain Tesco Express.

The convenience store market in Hong Kong is considered underserved when compared with Japan and Taiwan.