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Tencent may bid for US$3b Temasek stake in AS Watson

Singapore

CHINESE Internet giant Tencent Holdings Ltd is weighing a bid for part of Temasek Holdings' stake in global retailer AS Watson Group, people with knowledge of the matter said.

The Singapore state investment company is considering selling around a 10 per cent stake in AS Watson for about US$3 billion, according to the people, who asked not to be identified because the information is private. That is just under half of its 25 per cent holding. Tencent may team up with some investment funds for an offer for the stake in AS Watson, which is a unit of Hong Kong tycoon Victor Li's CK Hutchison Holdings, the people said.

The holding has also drawn interest from Chinese tech billionaire Jack Ma's Alibaba Group Holding, according to the people. Potential buyers are being invited to management presentations this month, one of the people said.

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Temasek is working with an adviser to explore options for its 25 per cent holding in AS Watson after receiving some preliminary interest, Bloomberg reported in January. It bought the stake in AS Watson for HK$44 billion (S$7.6 billion) in 2014.

No final decisions have been made, and there is no certainty the suitors will proceed with firm offers, the people said. Differences in valuation expectations could make reaching a deal difficult, and Temasek may still decide to keep the stake, according to the people.

Representatives for Tencent and Alibaba declined to comment. Temasek said in an e-mailed statement that it does not comment on speculation. BLOOMBERG