Sun Art Shares Halted Amid Rumors Over Alibaba Bid
(Beijing) — Sun Art Retail Group Ltd., the parent of China’s largest grocery chain, asked for its shares to be suspended in Hong Kong on Friday amid speculation that the company is in talks to sell its supermarket operation, RT-Mart, to e-commerce giant Alibaba Group Holding Ltd.
Shares in Sun Art, the biggest hypermarket operator in China, jumped 6.5% to HK$8.70 ($1.12) on Friday morning before the suspension, their highest level in two years, after Chinese media reported that the two companies were in discussions.
In a brief statement to the Hong Kong Stock Exchange, Sun Art said trading had been halted “pending the release of an announcement in respect of inside information.” Alibaba has declined to comment on the media reports.
Sun Art is the largest hypermarket operator in China with a market share of almost 12%, compared with Wal-Mart Stores Inc.’s share of 10%, according to Euromonitor data. Sun Art has two brands — RT-Mart and Auchan — and at the end of 2015, it had 409 shops across the mainland, according to its website.
RT-Mart could fill a key gap in Alibaba’s growing presence in the online grocery market, which is generally seen as the last frontier for China’s maturing e-commerce market, as internet sales of apparel and electronics slow down.
The Hangzhou-based e-commerce giant set up its grocery division in 2012, but made little progress until 2015, after investments in logistics and warehousing to ensure prompt delivery of perishables began to pay off.
Alibaba has also made multiple investments in hypermarket chains, including a 32% stake in Sanjiang Shopping Club, a discount grocery chain, in November.
JD.com, Alibaba’s largest rival, is also focused on expanding in the grocery and daily necessities sector or the retail market. It has set a target to sell more than 100 billion yuan ($14.6 billion) worth of fresh food and other daily necessities in 2017, company Vice President Feng Yi said on Thursday.
JD.com, which runs its own warehouses and distribution and delivery system, stepped up its partnership with Wal-Mart in October as the latter doubled its investment in the Beijing-based company.
Contact reporter April Ma (email@example.com)