By Tracy Qu
Yonghui Superstores shares surged, hitting the daily upper limit for China-traded equities, after retailer Miniso disclosed plans to acquire near a 30% stake in the Chinese supermarket operator.
Yonghui stock jumped 10% Tuesday morning in Shanghai trading, while Miniso shares slid 29% in Hong Kong. Miniso's U.S.-traded shares closed 17% lower.
Miniso said Monday that it will acquire an up to 29.4% stake in Chinese supermarket operator Yonghui for 6.3 billion yuan, equivalent to around $893.4 million.
Yonghui operates approximately 850 supermarket outlets across China. The company has reported losses for three consecutive years.
The collaboration between Yonghui and Miniso will enhance economies of scale, optimize cost structure and create value for consumers, said Ye Guofu, chairman and chief executive of Miniso, in a statement.
Nomura analysts Jizhou Dong and Riley Jin described the acquisition as a "bold move" in China's supermarket business but warned that the move might be too aggressive for Miniso.
"[The] sudden acquisition of Yonghui brings notable uncertainties with no immediate synergy," the Nomura analysts said in a research note.
Write to Tracy Qu at tracy.qu@wsj.com
(END) Dow Jones Newswires
September 23, 2024 22:35 ET (02:35 GMT)
Copyright (c) 2024 Dow Jones & Company, Inc.
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