MoFo Represents Private Equity Firm Ascendent Capital in HK$5.8 billion (US$748 million) Combination of China Retailers

Morrison & Foerster today announced that it is representing Ascendent Capital Partners, a China-focused private equity firm, in the proposed acquisition by Wumart Stores, Inc. of a minority interest in C.P. Lotus Corporation, the retail flagship company in China for the Charoen Pokphand Group, for approximately HK$548 million, the proposed acquisition by C.P. Lotus of a minority interest in Wumart for approximately of HK$2.9 billion, and the proposed acquisition by Wumart of C.P. Lotus’s operations in certain provinces in China, including Beijing and Shanghai, for approximately HK$2.34 billion announced yesterday.

Ascendent Capital, which assisted in bringing the Wumart/C.P. Lotus transaction to fruition, proposes to subscribe for an aggregate of 16.6 million new shares of Wumart for HK$232 million and up to a further 16.6 million new shares in Wumart when the CP Lotus deal closes. A representative of Ascendant Capital will also join Wumart’s board of directors.

Jeremy Hunt, a Morrison & Foerster partner based in Hong Kong, led the deal, together with Marcia Ellis, a Morrison & Foerster partner based in Hong Kong, and with assistance from Hong Kong associate Ivy Tsang.

“This transaction is part of an exciting trend toward consolidation in China’s fragmented retail grocery market. Ascendent Capital will bring its deep knowledge of the consumer retail industry in China to assist in facilitating a smooth integration process for Wumart and CP Lotus,” said Mr. Hunt.

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