Toys R Us Asia mulls IPO

Toys R Us Asia is investigating the feasibility of listing in Hong Kong.

According to overseas media reports, funds raised from selling shares in the Hong Kong-headquartered joint venture with Fung Group could assist the crippled US parent company with its restructuring under bankruptcy protection.

The Toys R Us Asia business is performing solidly and the company is in the process of expanding its store network.

Toys R Us and Fung Group have been discussing the option with investment banks, reports Deal Street Asia. A deal could value the Asia unit – not included in the bankruptcy filing – at as much as US$2 billion.

Toys R Us owns about 85 per cent of the Asian venture, with the balance held by the Fung Group, the private holding company of Hong Kong billionaire businessmen Victor and William Fung.

Toys R Us dominates the $20.7 billion Asia Pacific market for traditional toys and games, according to Euromonitor International. It had a 20 per cent share last year of sales of dolls, action figures, puzzles and similar products. Its closest regional competitor had a 1.4 per cent share.

Growth in Japan and the Asia Pacific helped offset weaker sales in Europe and the US in the quarter to April 29, Toys R Us reported in June. This followed the company combining its Japanese business with a JV running more than 400 stores in greater China and Southeast Asia.

With 1600 stores internationally, the brand sought bankruptcy protection after being ravaged by online rivals and price wars.

Toys R Us Asia was set up in 1986. The Fung Group is also the biggest shareholder in Li & Fung, a global supply chain with clients including Wal-Mart Stores.


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