Fungs’ veto to play havoc with Toys “R” Us sale in Asia

The Fung family’s right-of-first-refusal is likely to disrupt the $1 billion sale of the toy retailer in Asia. Private equity bidders and distressed debt holders face disappointment.

The fire sale of bankrupt retailer Toys “R” Us Inc.’s Asian arm may struggle to fetch as high a price as bondholders expect due to clause in the shareholder agreement which gives the Hong Kong-based Fung family the right to match any bid for the business, according to people close to the process. 

Private equity firms have offered over $1 billion for Toys “R” Us Asia hoping to ride the fast growth in the region’s consumer sector, driven by an economic updraft, an expanding middle class and rapid urbanisation, the people said.

However the Fungs are in a strong position to block them all. The Fung...

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