Shares in China Resources Enterprise, the state-owned supermarkets and beer group, leapt more than 50 per cent after an offer from its parent to buy back its lossmaking non-beer businesses for $3.6bn. The move is another twist in China’s state-owned enterprise reforms.
The figure represents a pre-tax loss to CRE of $877m on the value of the assets, but the company’s shares shot up by more than 60 per cent in early trading in Hong Kong. They closed the day 56 per cent higher at HK$23.70.
The deal will leave CRE focused on brewing — it owns the top-selling mainland Snow Beer brand — while its parent, China Resources Holdings, which owns almost 52 per cent of CRE, will take on its food and coffee shop units as well as its ailing supermarkets, including a joint venture with Tesco.