Wumei wins stake in Yinchuan Xinhua department store
Chinese big-box retailer Wumart has won a share tender in Yinchuan Xinhua department store.
Wumei Holdings and associated investors increased their stake in the West Chinese retailer to 40 per cent earlier this month, according to regulatory filings. The approximately RMB250 million (US$36.5 million) investment will allow Wumei to expand its base and fend off a hostile takeover bid that has loomed over Xinhua for the past three years.
Yinchuan Xumei is the largest retailer in Yinchuan city, the capital of China’s Ningxia province. It has been actively pursued by Shanghai Baoyin, now effectively denied further takeover options. Baoyin is the firm’s second largest shareholder, but has been denied board representation since attaining its 33 per cent holding last year in a matter concerning Baoyin’s unapproved application for profit distribution.
Wumei has held a stake in the highly profitable firm since 2004. It is one of the country’s largest and most successful physical store networks.