Jardine’s DFI says S$125 million sale of Singapore food business not price-sensitive, but investors disagree
Giant, Cold Storage operator also explains that secondary listing on SGX frees it from obligation to make bourse announcement
[SINGAPORE] Supermarket and retail store operator DFI Retail Group on Monday (Mar 24) explained why it did not announce the divestment of its Singapore food business on the Singapore Exchange (SGX).
As SGX is a secondary listing site for the group’s shares, DFI is “only obligated to announce regulatory announcements lodged in the UK, and not on the SGX”, it said. Its primary listing is on the London Stock Exchange, with secondary listings in Singapore and Bermuda.
DFI added that under UK listing rules, it is “not required to make a regulatory announcement in relation to the divestment because the size of the transaction is not considered price-sensitive, and the divestment does not constitute a significant transaction” for the group.
Therefore, the press statement it made was voluntary, and no announcements were planned to be released on its secondary listing venues despite having issued a media statement at 1 pm, DFI said.
As it turned out, news of the deal did move the company’s share price.
At 2.25 pm, the counter rose 6.2 per cent or US$0.14 to an intra-day high of US$2.39, with some 1.6 million shares having changed hands. The last time it traded at such levels was on Dec 10. It closed US$0.02 or 0.9 per cent higher at US$2.25 last Friday, before the news.
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By 4.39 pm on Monday, the counter had eased back down to US$2.35. It ended the day’s session up 4 per cent, or US$0.09 higher, at US$2.34.
On Monday morning, the group announced that it was selling its Singapore food business to South-east Asian retail conglomerate Macrovalue (Malaysia) for an initial purchase price of S$125 million, subject to adjustments.
Macrovalue is set to fully acquire Cold Storage Singapore, which comprises 48 stores (under the Cold Storage, CS Fresh and Jason’s Deli brands), 41 Giant stores and two distribution centres.
The transaction is expected to be completed in the second half of 2025, said DFI.
After the divestment, the group will train its focus and investment in Singapore on its Guardian and 7-Eleven businesses, which “hold significant growth potential”, said Scott Price, group chief executive of DFI Retail Group.
He added that Macrovalue is “ideally positioned to drive the next phase of growth for the Singapore food business”. Given Macrovalue’s scale and procurement power across both Malaysia and Singapore, it is equipped to unlock efficiencies and achieve outcomes that would be more challenging for retailers which have only a Singapore presence, he said.
He expects the transaction to bring about an enhanced product range and more competitive pricing for customers in Singapore.
Founded in 2022, Macrovalue is a special-purpose vehicle equally owned by Malaysian businessmen Andrew Lim and Gary Yap. It purchased DFI’s Malaysia food business in 2023 for an undisclosed sum.
Macrovalue said it would continue to drive growth of the acquired brands and ensure continuity of local management and operation teams.
The company added that the retention of Lim Boon Cheong, DFI’s managing director for the Singapore food business, is core to its growth strategy as he has been pivotal in shaping Cold Storage for more than 30 years. He also has extensive retail experience and understanding of Singapore consumers, as well as the brand’s heritage and identity.
In its latest earnings results for its full year ended Dec 31, 2024, DFI posted a 29.7 per cent rise in underlying profit to US$200.6 million from the year-ago period.
However, its full-year revenue dropped 3.3 per cent to US$8.9 billion, and it made a net loss of US$244.5 million, reversing from the US$32.2 million net profit in the prior year.
The loss was attributed to non-trading losses, primarily the US$114 million loss linked to the divestment of Chinese supermarket operator Yonghui Superstores, a US$231 million impairment of interest in Robinsons Retail, and a US$133 million goodwill impairment of its Macau and Cambodia food businesses.
The group had expressed optimism about the growth prospects of its health and beauty businesses. Its chairman, John Witt, said that it would aim to consolidate its position in markets where it has a strong presence, while concurrently expanding key businesses such as its convenience vertical.
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