In a significant move within the e-commerce landscape, Uni-President Enterprises Corporation recently announced its acquisition of a 30% stake in PChome, a renowned player in the online retail sector. This development follows their earlier purchase of an 80% share in Yahoo Taiwan’s e-commerce operations in August of this year, reinforcing Uni-President’s position as a major force in Taiwan’s food and distribution industry.
The news was revealed on October 23, where PChome’s Board of Directors approved a private placement of common stock, allowing Uni-President to participate in the subscription. The total amount of shares available for this private placement is approximately 61.69 million, which would represent around 30% of PChome’s post-increase issued shares. However, the exact pricing and the date for establishing the private placement will depend on market conditions and must be approved in a shareholder meeting scheduled for December 19.
At an estimated share price of NT$31, this transaction could see Uni-President investing over NT$1.5 billion (around US$210 million) for the stake, while also securing two seats on PChome’s board, which consists of six directors and three independent directors.
PChome has expressed optimism about bringing in Uni-President as a strategic partner, anticipating positive effects on operational funding and long-term growth. The partnership is expected to strengthen their financial structure and enhance shareholder equity. Uni-President, on its part, sees this move as a step towards capitalizing on the growth potential within the e-commerce sector, continuing its investment strategies to adapt to the evolving digital economy.
This recent activity in e-commerce is part of a broader trend for Uni-President, which previously converted a US$25 million investment in convertible bonds from Yahoo into equity. In September, they established a joint venture with Yahoo Taiwan, gaining substantial control over Yahoo’s e-commerce business.
Chairman of Uni-President, Lo Chih-Hsien, was previously questioned about the possibility of investing in PChome but responded cautiously, emphasizing the importance of allowing PChome’s current management to operate without undue speculation.
PChome has faced challenges in recent years, including operational stagnation and persistent losses, falling behind more dynamic rivals like Fubon Media’s momo, as well as international competitors like Coolpad and Shopee. During an earlier shareholders’ meeting, Chairman Jan Hung-Chi mentioned the potential for future capital increases or strategic partnerships as possibilities to rejuvenate the company.
Industry insiders suggest that PChome’s operations are at a low point, with limited prospects for a major rebound. They believe Uni-President’s investment comes at a strategic low point, and the addition of new shareholders might prompt positive changes in management structure and operations.
With the acquisition of a nearly 10% market share in PChome, combined with their interests in Yahoo and their own e-commerce channels, Uni-President begins to carve out a formidable presence in Taiwan’s e-commerce market, which is valued at over NT$500 billion (around US$70.2 billion). While they still trail behind momo’s approximately 30% market share, Uni-President’s physical retail advantage positions them well for future growth in an integrated online-offline business model.
