18621
Firms Invited to Bid for Tesco’s S. Korea Unit
World Economy

Firms Invited to Bid for Tesco’s S. Korea Unit

Tesco has invited at least six firms including KKR & Co and Carlyle Group to bid for its South Korean unit Homeplus, valued at about $6 billion, people familiar with the matter told Reuters.
A sale is seen as Tesco’s best bet to cut debt and fund a turnaround plan as it battles to recover from an accounting scandal and reverse market share losses to discount chains.
If sold to private equity for $6 billion – which the sources say represents the equity value of Homeplus – the sale would be Asia’s biggest private equity deal, according to Thomson Reuters data. It is also set to be the region’s second-largest consumer retail deal ever.
London-based CVC Capital Partners, Hong Kong-based Affinity Equity Partners and Asia-focused MBK Partners were also invited to bid, the people said, declining to be identified as the sale process has not been formally made public.
Homeplus is Tesco’s largest business outside Britain, with annual revenue of 7.05 trillion won ($6.3 billion) in 2014. It has more than 400 stores, 500 franchise stores and over six million customers a week.

 Pressure Persists
But the business, which operates in a mature and competitive market, has been under some pressure, recording at least two years of declines in same-store sales in a row.
Given the deal size, bidders moving to the next round are likely to team up or look to bring in sovereign wealth funds to help finance the acquisition, the people added.
Singapore state investor Temasek Holdings and other investors in private equity funds, such as pension funds, are likely to be approached as the bidding proceeds, one person said.
Temasek has shown interest in retail assets and last year acquired a 25% stake in Hong Kong tycoon Li Ka-shing’s AS Watson for about $5.7 billion, in its single-biggest investment ever.
Tesco and its advisor HSBC have provided the potential suitors with Homeplus’ financial details and asked for indicative bids to be submitted later this month, sources said. They added that the business had about $750m in earnings before interest tax, depreciation and amortization.

Short URL : http://goo.gl/1tU9NC

You can also read ...

Saudi Arabia Bleeds as Capital Flight Continues
As Saudi Arabia raises the stakes in its dispute with Canada...
 Final Nail in Abraaj Coffin
The Abraaj Group has been put through the ringer in past...
Experts Say China Economy Manageable
Recent external pressures, a general global trade malaise...
Qatar Pledges $15b Investment :      Turkish Lira Weakens 6% on Threat of More US Sanctions
Turkey’s battered lira weakened more than 6% against the...
Europe Should Resist Illegal US Penalties
European countries should take effective steps to counter US...
Indonesia Sets Moderate Growth Goals
Amid rising external pressures, Indonesia’s economy is...
Australia Drought Could Cost $12 Billion
The Reserve Bank of Australia and a new report have warned of...
 Crypto Scams on the Rise in UK
Crypto currency scams are using images of celebrities and...

Trending

Googleplus