By Denny Thomas and Stephen Aldred
HONG KONG (Reuters) - Hutchison Whampoa Ltd <0013.HK>, controlled by Asia's richest man Li Ka-shing, has received at least seven offers for its Hong Kong supermarkets business, ParknShop, people familiar with the matter told Reuters on Friday.
Hutchison set an asking price of between $3-4 billion for the business, which operates 345 stores in Hong Kong, mainland China and Macau, after a review last month.
Octogenarian Li plans to use the sale proceeds to expand Hutchison's health and beauty retail operations, which have a bigger global footprint and offer higher margins compared with the supermarket business, sources have told Reuters.
The offers for ParknShop came from Australia's Woolworths Ltd
It was not immediately clear who the other bidders were.
Hutchison's advisers Bank of America
Australian conglomerate Wesfarmers Ltd
Australian retailers have been looking for growth outside their home markets as the domestic economy slows.
At $4 billion, ParknShop would be valued at about 20 times earnings one of the sources said. Supermarket operators in Asia-Pacific trade at a median 12-month price-to-earnings multiple of 22 times, according to Thomson Reuters data.
The bidders are attracted by the lack of competition in a market dominated by just two operators - ParknShop and Singapore's Dairy Farm International Holdings Ltd
However some were deterred by Hong Kong's high rentals and the stiff asking price, sources previously told Reuters. About 270 of ParknShop's stores are located in Hong Kong.
The winner could also use ParknShop's Chinese business to expand into the mainland, which has proved to be difficult for foreign companies.
Established in 1973, ParknShop held a 40 percent share of the Hong Kong market for supermarkets for the year to June, according to Nielsen Homescan, with Dairy Farm on 33 percent.
ParknShop generated HK$21.7 billion ($2.8 billion) in revenue last year and earnings before interest, tax, depreciation and amortization (EBIDTA) of HK$1.4 billion, one person familiar with the matter said.
The company has recorded less than 10 percent revenue growth in the medium term, one of the sources said.
"We are still conducting strategic review of our supermarket business... and do not have a definite timetable for completion," ParknShop said. KKR declined to comment.
Other companies mentioned in the report were not immediately available to comment.
(Reporting by Denny Thomas and Stephen Aldred; Editing by Michael Flaherty and Erica Billingham)