Monday 20 November 2017

Tesco considers sale of South Korean retail business

Tesco has seen its market share dwindle in recent years
Tesco has seen its market share dwindle in recent years

Ruth David, Vinicy Chan and Kiel Porter

Tesco, the UK's biggest supermarket chain, is considering a sale of its South Korean business that could fetch more than €4.4bn, people with knowledge of the matter said.

The company is weighing options including a sale or initial public offering of Homeplus, one of the people said, asking not to be identified as the details aren't public.

Tesco is working with advisers including HSBC Holdings on the process, the people said, adding that no final decision has been made on how to proceed. Tesco, which in April reported the biggest annual loss in its 96-year history, has been weighing divestitures as it seeks to plug a debt hole of about £21.7bn (€29bn).

The company said in January it hired Goldman Sachs Group to explore strategic options for its data-analytics unit Dunnhumby. The grocer has invited groups including private-equity firms Bain Capital, CVC Capital Partners and Warburg Pincus to submit offers for Dunnhumby, two people with knowledge of the matter said.

The business could fetch about £1bn, the people said.

Reuters reported Tesco's plans to sell the South Korean business earlier yesterday in Hong Kong, citing unidentified people.

Spokesmen for Bain, Goldman Sachs, HSBC, Tesco and Warburg Pincus declined to comment.

A representative for CVC didn't immediately respond to an email seeking comment. Bruno Monteyne, a London-based analyst at Sanford C Bernstein & Co, valued Tesco's South Korea, Thailand and Malaysia units together at about £9bn in October.

He put the price of Tesco Bank, also a potential sale candidate, at about £1.4bn.

Irish Independent

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