Alibaba’s Sun Art suspends Hong Kong trading, sparking divestment speculation

Alibaba took control of Sun Art Retail Group four years ago to pursue a ‘new retail’ strategy

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An Auchan hypermarket store in Beijing, run by Sun Art Retail Group. Photo: Reuters

Ann Caoin ShanghaiandWency Chenin Shanghai

Published: 9:00pm, 30 Sep 2024Updated: 9:39pm, 30 Sep 2024

China’s largest hypermarket operator has suspended the trading of its Hong Kong-listed stock since Friday pending an announcement on mergers and acquisitions, fanning speculation that Alibaba Group Holding may divest its controlling shares.

Alibaba took control of Sun Art Retail Group from the Mulliez, a wealthy French family, for HK$28 billion (US$3.6 billion) in October 2020, as the e-commerce giant sought to synergise online shopping and offline hypermarkets under a “new retail” model.

Sun Art shares traded most recently at HK$1.79, down about 78 per cent from the price per share of about HK$8.1 that Alibaba paid at the time of its investment. Alibaba is the owner of the South China Morning Post.

Sun Art did not provide details about potential takeovers or mergers in its stock exchange filing. The company declined to comment further. Alibaba did not immediately respond to a request for comment on Monday.

An Alibaba office building in Beijing. Photo: Reuters

The wait has raised market speculation about a partial or complete sell-off of Alibaba’s Sun Art stake. The hypermarket operator has attracted “preliminary interest” from private equity firms, including DCP Capital and Hillhouse Investment, Bloomberg reported on Friday, citing unnamed sources.