Shanghai Tobacco Group is selling its 20 percent stake in Shanghai Watsons, with a price of 74.87 million yuan ($12.08 million), according to Shanghai United Assets and Equity Exchange.

China Business News said the 20 percent stake will likely be bought by Hong Kong billionaire Li Ka-shing's Hutchison Whampoa Ltd.

Hutchison Whampoa bought AS Watsons Group in 1981. Shanghai Watsons is a joint venture owned by Shanghai Tobacco (20 percent) and Thalgo (HK) Investment Ltd (80 percent), an investment arm of Hutchison Whampoa.

Shanghai Tobacco had sold a 20 percent stake to Thalgo in 2008.

Earlier reports said Li is seeking AS Watsons' IPO on the capital market, which will likely become the biggest retail sector IPO of this year.