Shares of MINISO Group Holding Limited (NYSE: MNSO) demonstrated a notable recovery, regaining last week’s losses on the US stock charts. As of the latest market check, MNSO stock surged by 16.79%, trading at $16.35. This rise in value was driven by a recent strategic acquisition, marking a significant development for the company.
Strategic Acquisition of Yonghui Superstores
In an attempt to purchase a total of 29.4% of Yonghui Superstores Co., Ltd.’s issued and outstanding shares for around RMB6.3 billion, MINISO this week entered into share purchase agreements with a few of the company’s owners. Following the completion of this transaction, MINISO will own the largest single stake in Yonghui, a leading retail chain operator in China.
Yonghui, a 2010-founded company listed on the Shanghai Stock Exchange, operates more than 850 supermarkets in China that offer fresh food and daily essentials. The company has been instrumental in the People’s Republic of China’s transition to modern grocery shops by bringing fresh fruit. Yonghui has remained one of the top grocery chains in the country, with projected sales of RMB78.6 billion in 2023.
Financial Specifics and Strategic Consequences
Under the terms of the share purchase agreements, MINISO’s wholly owned subsidiary, Guangdong Juncai, will compensate each seller with a cash payment of RMB2.35 per share—reflecting a 3.1% premium over Yonghui’s closing price on September 20, 2024. The acquisition will be financed through a mix of internal resources and external financing.
In conjunction with the share purchase, MINISO has implemented parent guarantees to ensure the fulfillment of Guangdong Juncai’s obligations. The CEO and Chairman, Mr. Guofu Ye, has also promised to support the deal by voting in favor of it at shareholder meetings.
Opportunities for Development and Cooperation
In addition to offering MINISO significant growth prospects, this calculated action seeks to provide long-term value to shareholders. MINISO’s experience in design-led goods puts it in a good position to help Yonghui create premium self-branded items that adapt to shifting consumer tastes. Furthermore, collaboration between the two entities in retail channel enhancements and supply chain optimization will enable MINISO to maximize resource sharing, improve cost efficiency, and create added value for consumers.
