No Takers for ParknShop

Li Ka-shing may wonder if his valuations are too high or buyers are too cheap

Tycoon Li Ka-shing must be wondering if his right-hand men have got it wrong or potential suitors are too cheap -- but no one's bid for ParknShop under AS Watson was anywhere close to what he was hoping for.

When the sale of one of Hong Kong's biggest supermarket chains was announced, the media wondered if this was a sign that "Superman" was liquidating his assets and moving out of the city.

There were at least four companies interested in ParknShop -- Thai industrial giant Charoen Pokphand Group, Australian retailer Woolworths, state-owned China Resources Enterprise and Japan's Aeon.

But in the end only two companies made non-legally binding bids which were far below what Li and parent company Hutchison Whampoa, that includes AS Watson retailing.

"We're talking about $1 billion or even $2 billion in difference [between the bids and the expected price level] rather than just several hundred million," said a source close to the matter. "Such a big difference can easily and quickly kill the deal because there will be almost no room for negotiations."

Hutchison was looking for $4 billion, but one of the two bidders only put in a $2 billion bid.

So on October 18, Hutchison surprised everyone again and scrapped the ParknShop sale, and announced it would start a review to maximize the value of the retail business.

While ParknShop looks like a nice supermarket, the fresh produce is shockingly bad. There were rumours that ParknShop didn't handle its produce well and housewives would complain that fruits and vegetables were regularly off because they weren't refrigerated in cold temperatures.

I myself have experienced two incidents where the eggs were off -- and one of the eggs contained a black yolk. Needless to say it stank badly and since then I have refused to buy eggs at ParknShop again. I have pretty much stopped buying fresh produce there.

The fruits and vegetables seem to be in a sad state there and so I resort to either shopping in the wet markets during the weekends or at competitor Wellcome, which has cornered 70 percent of Hong Kong's grocery market.

Seems like more of Li's sheen is rubbing off and fewer people are pleased with his business schemes to squeeze even more profits out of ordinary folk.

The man is 85 years old and according to Forbes, as of March Li is worth $31 billion. How much more money can he need?