BIG C DEAL | SootinClaimon.Com

CENTRAL GROUP yesterday confirmed it had sold its remaining 25-per-cent stake in Big C Supercenter to TCC Group, a holding company owned by tycoon Charoen Sirivadhanabhakdi.

An industry source said Central probably made this decision because of its ownership in Tops Supermarket and FamilyMart. Parts of their operations overlap Big C’s, he said, adding that hypermarkets are not Central’s business focus for Thailand. He also noted that the value of Big C Thailand was far higher than Big C Vietnam’s.

“Vietnam seems to be more interesting to Central, judging from the financial sums to be invested in Thailand and possible cannibalisation of Tops and FamilyMart,” the source said.

Central, the largest retail conglomerate in Thailand, accepted a tender offer from TCC Group. The deal, worth at least Bt50 billion, will help Central finance the purchase of Big C Vietnam.

Central declined to provide any details on the deal, saying its executives were travelling outside the country.

Central Group, which has interests spanning from hotels and resorts to property and restaurants, also bid when Casino Group was selling its Thai assets, eventually losing out to Charoen. He bought the French retailer’s majority 58.6-per-cent stake in Big C Thailand for 3.1 billion euros (Bt124 billion) in February.

Central in partnership with Nguyen Kim Group recently acquired Big C Vietnam from Casino for 920 million euros. Central Group chief executive officer Tos Chirathivat said the acquisition represented the strength of Central’s will to keep expanding its business in Asia. Operating for more than 18 years, Big C Vietnam has 43 stores nationwide, comprising 33 hypermarkets and 10 convenience stores, and 30 shopping malls. Total revenue in 2015 was about 586 million euros.

Quant, an independent financial advisory, applied eight methods to calculate the value of Big C Thailand, suggesting fair prices ranging from Bt152.7 to Bt265.7 per share. The highest price came from the comparison of the company’s price-to-earnings ratio and other domestic retailers’ in the past 12 months.

ศาสตร์เกษตรดินปุ๋ย : ขอบคุณแหล่งข้อมูล : หนังสือพิมพ์ The Nation

http://www.nationmultimedia.com/business/Charoen-has-genuine-interest-in-retail-business-so-30278926.html

BIG C DEAL

Kwanchai Rungfapaisarn

The Nation
February 10, 2016 1:00 am

Tycoon Charoen Sirivadhanabhakdi’s acquisition of Big C Supercenter has raised questions about his real attentions: whether he has a genuine wish to enter the retail business is merely interested in Big C’s assets.

The fact that Charoen is heavily into real estate has led some to believe that he was interested in the land currently housing Big C stores, rather than the retail business. One of his close aides also said he joined the bid for Carrefour in 2011 because of his land-acquisition interests.

However, a veteran retail businessman who asked not to be named noted that it is not the same situation with Big C. He said Charoen’s due diligence should have revealed that about 40 per cent of the land Big C stores occupy is on leasehold.

He said this explained why Big C, No 2 in the modern-trade segment after Tesco Lotus, was valued at less than Siam Makro. While the 59-per-cent stake in Big C is valued at 3.1 billion euros or about Bt123 billion, the 64-per-cent stake in Siam Makro bought up by CP All in 2013 was valued as high as Bt189 billion.

The source also said much of the land under Big C stores actually belonged to Central Group, including plots at Hua Mark, Wongsawang, and Rat Burana.

Human resources

“I believe that Khun Charoen’s motive is to have retail channels, which will benefit [other parts of] the business empire, both Berli Jucker and Thai Beverage, which manufacture consumer goods and beverage products,” said the source.

Another source close to Big C said the retailer’s human resources were also a key reason, given that it takes time to develop personnel.

“The retail business, particularly when it involves large-scale stores, requires people who have extensive experience. It’s a challenge to train people from scratch,” he said.

Founded by Central Group in 1993, Big C now employs 27,000 people.

Through Big C, Charoen bought himself easy access to the Thai retail market. The operator now operates about 50 outlets in Bangkok, some in prime locations. The acquisition took place at a time when the environment is tough for newcomers, because of very restrict regulations, such as city zoning, set by local authorities.

Still, market sentiment could be dulled by the economic slowdown and fierce competition from supermarkets and convenience stores that lure shoppers away from hypermarkets.

Kasikorn Research Centre anticipates that modern trade will grow by only 1.5-2 per cent this year, compared with 1.8 per cent last year. The growth rate has been declining since 2012. Before that, hypermarkets used to grow by an average of 9.2 per cent per year.