Wumart buys CP Lotus supermarkets for $302 mln

Wumart Stores, a leading Chinese retail chain, announced Tuesday it has agreed to buy most CP Lotus supermarkets in the mainland for 2.35 billion HK dollars (302 million U.S. dollars).

Wumart and CP Lotus, both listed at the Hong Kong Stock Exchange, made a joint announcement after trading ended.

According to the announcement, Wumart will acquire all BVI entities -- five wholly owned subsidiaries of CP Lotus which hold the operations of the company in Beijing, Shanghai and other mainland regions.

The purchase includes 36 stores with a sales floor area of around 310,000 square meters. Revenue at the stores reached approximately 7.1 billion yuan (1.15 billion U.S. dollars) in 2012, it said.

The deal excludes stores in Guangdong and Hunan provinces.

In addition, Wumart will buy 1.09 billion ordinary shares and 1.39 billion convertible preference shares in CP Lotus, representing about 9.99 percent of the total issued share capital of the company, at a cost of 547.9 million HK dollars.

In return, CP Lotus will buy 206.6 million Wumart H-shares at 14 HK dollars per share, representing about 13.77 percent of Wumart's total issued share capital on an enlarged basis, for 2.89 billion HK dollars.

The share price represented a 5.1-percent and 5.7-percent discount over Wumart's closing share price on Oct. 11 and 60-day average closing price up to and including Oct. 11 respectively, according to the announcement.

The acquisition is subject to regulatory approvals and shareholders' approval of Wumart and CP Lotus, it added.